Alibaba, the Chinese e-commerce company, is going public via an initial public offering underwritten by Goldman Sachs, JPMorgan, Morgan Stanley, Citigroup, and Credit Suisse. Alibaba was founded 15 years ago in 1999 in a one-room apartment in Hangzhou. It is now controlled by a 28-member partnership and proclaims that it will build a legacy which will last “at least 102 […]
Tag: retail sales
US data have been better
European periphery market access continues to improve
Dollar weakness may be China-related
Gold continues to get safe haven bid
China’s slowing more likely to be abrupt
Ukraine has become a military issue; contagion will increase
A full-blown emerging markets crisis is now likely
As a confirmation of a significant downward adjustment to China’s growth, a battery of economic reports yesterday morning all came in materially below expectations.
By Marc Chandler US retail sales rose 0.3% in February, a little more than expected. The news was blunted by sharp downward revisions to the January series, leaving the level of retail sales lower and pointing to somewhat less personal consumption to drive GDP here in Q1. The take away is that as the weather returns to a greater semblance […]
Canada reported dreadful December retail sales and somewhat stronger than expected price pressures in January. The main take away is that a more dovish line from the central bank when it meets on March 5 is likely avoided.
Themes for today:
Commodities: soybean prices could fall due to increased supply. This would be troublesome for Argentina.
Emerging markets: Of the fragile five, India is looking better, Brazil is still a big concern.
Developed Markets: House price inflation makes France, the UK, Australia and Canada vulnerable to real economy shocks.
US: Consumers are only supporting 1-2% growth. Q1 will be weak. Inventory builds are still the big story.
Again, the income to support sales just doesn’t seem to be there, as the sub 3% federal deficit doesn’t seem to have been providing the spending needed to offset the demand leakages (unspent income). And squinting at the jobless claims chart, if anything, it seems to have bottomed and be nudging irregularly higher.
Former Morgan Stanley Chief Economist Stephen Roach isn’t buying the US recovery. The economist, now a Senior Fellow at Yale University, talked to Bloomberg Television’s “Surveillance” earlier today to discuss the US economy, as well as emerging markets, Apple’s stock repurchase and his new book “Unbalanced: The Codependency of America and China.”. Roach told Tom Keene: “the American consumer remains […]
This post is about three different topics, Bitcoin and e-Payments, the Minimum Wage, and consumer spending and Walmart. There has been a lot of discussion about all three and I believe I have an innovative way to attack all three issues that will satisfy most reasonable people. The idea is simply to for Walmart to conduct a de facto minimum wage increase of all of its minimum wage workers’ salary by giving them extra salary in e-payments usable only at Walmart and transferable securely via a payment algorithm similar to Bitcoin’s.
This past holiday sales season was weak for a number of retailers in the US. But, discounting was the culprit rather than poor demand by consumers. I see retail sales holding up but a shake out in retail is sure to come as the deflationary forces of internet price discovery put margin pressure on everyone.
The data for the holiday season suggest that that consumer spending in the United States remains robust. Though wage growth has yet to pick up, consumer spending remains robust enough to fuel further economic gains into 2014.
Most economic analysts are in a bullish frame of mind regarding the outlook for 2014. I believe 2014 will be better than 2013. Nevertheless, there are risks to this optimism, both regarding the real economy and the valuation of shares. Below are some highlights on where some of the hidden risks lie.