January business inventories were unchanged compared to a slip of 0.2% in December.
When business inventories begin to grow then there will be an increase demand for labor. Inventories tend to rise as the economy grows stronger. Business inventories are held by manufacturers, wholesalers, and retailers. A large part of wholesale inventories include imports so international trade will have an effect on the US Dollar.
February retail sales excluding autos jumped to 0.8% compared to January’s 0.6% and December’s 0.2% drop. The 3-mouth moving average is 0.4% compared to 0.26% last month.
A 3-month moving average gives an accurate account for retail sales. Consumer spending accounts for 2/3 of Gross Domestic Product so retail sales gives an overview of the economic direction.
Consumer Sentiment has been decreasing from a 2010 high of 74.4 in January. Yesterday the weekly jobless claims 4-week moving average increased from 470,500 to 475,500 from last week. This may have been reflected with March consumer sentiment dipping to 72.5 from 73.6 in February. High gasoline prices and a weak labor market are keeping the sentiment low in March.
Consumer Sentiment reflects the attitudes and spending habits of consumers and their perception of the economy as well as their own personal finances. The more confident consumers are about the economy, the more likely they are willing to spend. Implications will influence the stock and bond market as well as the strength in the US Dollar.
Equities to watch on January Business Inventories, February Retail Sales, March Consumer Sentiment sales numbers include both these sales numbers include: both consumer discretionary and staples sectors.
Some of the stocks to watch within these sectors include: Ross Stores and TJX Companies. Ross Stores (ROST) is nearing its 52 week high of 52.96 and sales were up 8% during last year’s difficult November’s Thanksgiving season. TJX Maxx (TJX) is nearing its 52 week high of 42.28 and owns TJX Maxx, Marshalls, and Home Goods stores.
