Retail Sales Wednesday – Is America Shopping?


Retail Sales are expected to be up 2% for January.

There were down 1.1% in December, so it might just be wishful thinking as they were down in November as well and haven’t been strong since June.  Durable Goods and Furniture have been consistently awful but Gasoline really killed us in December, down 4.6% and Gasoline was down to almost $2 (wholesale) in December and hit $2.70 in January – so Retail Sales are probably saved – yay?!???

Gasoline Feb 15 2023

That’s right, you know and I know and anyone who’s taken Econ 101 (or has common sense) knows that Consumers spending more money on Gasoline is not a positive sign for the economy but it is a positive sign for Big Oil Companies and they own the Government and you don’t – so we will continue to act as if strong gasoline sales (which takes spending money away from other retailers) is somehow good for the economy.  

Just look at that Retail Sales chart – it may as well be a Gasoline Sales Chart!  What total BS this all is, right?  That’s why I’m very concerned as the Retailers begin reporting Q4, when gasoline was pretty high in October and November – I’m not sure if the December pullback is going to be enough to have saved post-Christmas.  


That’s who we have on deck for this morning.  Now that the S&P 500s results are pretty much all in, we are turning to mid-cap and small-cap reports and those companies don’t have entire floors of accountants cooking their books – so we’ll get to some truth – hopefully…

Barrick beat by a penny, Biogen beat by more than 4 times what Barrick made in total (love them!), Generac is another one of our holdings and they beat too.  KHC beat but guided down, Krispy Kreme guided down, Corning beat cleanly, Sonic had kick-ass earnings and Sunoco, of course, beat with record profits.

PCE Feb 15 2023Bank of America said payments per household by its debit and credit-card customers rose 5.1% in January compared with the year before, up from a 2.2% increase in December but Social Security checks also increased 8.7% at the start of the year, the largest inflation-adjustment in decades, which gave roughly 70 million recipients more money to spend – so keep that in mind if we do get a positive number and people get all excited.  

The retail-sales report is only a partial picture of spending as it doesn’t include many services such as travel, housing and utilities. The Commerce Department will release its monthly report that includes more complete spending figures later this month – it was down 0.2% in December and it was down 0.3% adjusted for inflation.

Looking at the above PCE chart, please keep in mind that we are supposedly entering a strong economy.  Pay no attention to the fact that it LOOKS like it’s much weaker than last year…  Now you are all caught up with the average media pundit! 

Speaking of things that make you go “Duh!” – Trump’s lasting legacy is his change in long-standing US policy in which he allowed the export of Petroleum Products to the point where we now export close to exporting 4M barrels per day, which is 25% of the US’s entire “consumption” of crude oil.  This has, of course, been fantastic for oil companies and refiners but not so much for people who struggle to fill up their tanks:

Crude Exports Feb 15 2023

Gasoline 2 Feb 15 2023

What is the difference between $1.50 Gasoline and $2.50 Gasoline?  Well, we drive 15,000 miles a year and get 30 miles to a gallon so call it 150 gallons so we’re contributing $150 x 200M cars is $30Bn a year taken directly out of Consumers’ pockets and then, indirectly, higher fuel costs is one of the root causes of all inflation, which is sucking 15% more out of your paycheck than it did in 2020.

Consumer Spending is $6Tn a year and 15% of that is $900Bn and let’s forget, Trump doesn’t call reaching into your pocket and extracting $1Tn to be a “tax” – it’s just Capitalism and the fact that the poor suffer and the rich make record profits off the arrangement – well, what part of “Capitalism” do you not understand?  

You see the Government’s JOB is to PROTECT the people (who they supposedly represent) from overly greedy Capitalists, that’s how America has survived all this time.  When you shrink the Government and pack the courts with “pro-Business” Judges, you erode those safety measures and things begin to get out of control – kind of like if you put ramps in the Colloseum that let the lions feast on the audience. 

8:30 Update:  Retail Sales are up 3% but Mortgage Applications are down 7.7%, which is a disaster so not going to be able to celebrate the results.  The Empire State Manufacturing Index is also down 5.8% so it’s kind of a Recession with Inflation as people spend more money on less stuff, which is called Stagflation.  Stagflation makes people Depressed – which can lead to a Depression!  

USD Chart DailyStrong Retail sales can also strengthen the Dollar (in demand to buy more goods) so watch out if it pops back over 104, which could push the markets lower all by itself!  We’ve been stuck between 103 and 104 most of the month and I said in yesterday’s Live Member Chat Room that I thought we were consolidating for a move higher – we’ll see if that happens today. 

Still, let’s keep a little perspective on things as, adjusted for the 6% inflation, Retail Sales are actually LOWER than last year by 2.3% – but let’s not quibble over reality and try to enjoy the ride…



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Good morning. Here is the link to today’s webinar

Good Morning.

Phil ABNB is running away from us!!

Phil/DVN: Any thoughts? The miss was not terrible, but man are people overreacting….

Thx Phil! That dividend is very misleading, I see the variable component…. Hopefully the low price of /NG will act as a tail wind, should it bounce…

I think it might be to early, even selling an ITM short call today, once the crazy stock buyer wake up tomorrow and selling their stock, the delta loss on the long call will be much greater than on the short call.

we will see

AXP January U.S. Consumer Card Member loans net write-off rate of 1.5% vs 1.2% prior month with consumer loans 30 days past due 1.0% vs 1.0% prior month and U.S. Small Business Card member loans net write-off rate of 1.2% vs 1% prior month with loans 30 days past due of 1.0% vs 0.9% prior month

and American Express is generally the top 10%, not so good for small business either

I wonder if UNG is heading for a reverse split ala 2012, any thoughts from anyone? Otherwise is there an opportunity to play the bounce.

Solar is popping on a red day –good for the Stock of the Decade earnings after hours– this is one that has not gotten away from us yet – SUNPOWER

Last edited 1 month ago by ce

Hi Phil,
When you want to protect a portfolio with hedging, how do you decide the split between TZA, SQQQ, DIA ?. Is there a reason why you don’t do the SPXS for hedging? Thanks for the help

Morning Phil,
I sent an email the other day to regarding a billing question.
Hoping you or Andy can take a look for me.

hey everybody, just watch out if dollar clears 104.

Obama killed the export ban -If was another Budget Battle and I think they were also trying to stop flaring in North Dakota then.
How Washington unleashed fossil-fuel exports and sold out on climate | The Texas Tribune

Replied before seeing Phil’s reply, so I deleted my comment

Last edited 1 month ago by brucethenet

In other news here is a press release my son worked on. An example of the EPA making an arbitrary decision that benefits oil companies, but violates federal laws. The PE owners want to get this refinery going so they can refine Venezuelan oil and export it to the eastern seaboard. They can make $$ selling heating oil during cold snaps.

SunPower (NASDAQ:SPWR) reported quarterly earnings of $0.15 per share which beat the analyst consensus estimate of $0.12 by 25 percent. This is a 314.29 percent increase over losses of $(0.07) per share from the same period last year. The company reported quarterly sales of $497.30 million which beat the analyst consensus estimate of $488.36 million by 1.83 percent. This is a 29.33 percent increase over sales of $384.53 million the same period last year