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Market Brief – Friday 2/14/20

Stocks were mixed in early trading while Treasury yields were lower following this morning’s retail sales report for December. Crude oil rallied up to $52 per barrel despite reports that China is turning tankers away. Crude oil speculators are desperate to defend $50 per barrel, suggesting a break would send crude prices down to their low $40’s.

Retail sales rose +0.3% in January and +4.38% from this time last year. Core retail sales, excluding autos, rose +0.3% and when also excluding gas, it rose +0.4%. The retail control group, which feeds into the GDP calculation, came in flat for January. Retail sales growth is slowing against rising consumer prices, an indication of tight financial conditions.

Industrial production fell -0.3% in January and -0.83% from this time last year. Manufacturing production slid -0.1% in January and capacity utilization for factories slowed to 76.8%.

Despite strong retail sales in December, business inventories rose +0.1% and retail inventories, excluding autos, were flat at 0.0% in December.

Preliminary results from the University of Michigan’s consumer confidence survey showed a slight decrease in the present situation while both sentiment and expectations rose. Despite an increase in expectations, inflation expectations remain muted.

The New York Fed accepted bids for $47.65 billion of overnight dollar loans.

Other than Treasury yields closing lower on the day, the stock market was rather quiet headed into a three-day weekend.