Rover's Weekly Market Brief - 02/16/2024

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Economy

The Labor Department reported the consumer price index increased 0.3% in January, this follows seasonally adjust readings of (+0.2%), (+0.2%), and (+0.1%), over the previous months. The all items index has increased (+3.1%) over the last 12 months. This compares to readings of (+3.4%), (+3.1%), and (+3.2%) over the previous months. Over two-thirds of the all items increase is attributable to a (+0.6%) rise in the shelter index, which has increased 45 consecutive months. The food index increased (+0,4%), and follows readings of (+0.2%), (+0.2%), and (+0.3%) over the previous months. The energy index decreased (-0.9%) as decreases in the indexes for fuel oil (-4.5%) and gasoline (-3.3%) were partially offset by increases in the indexes for electricity (+1.2%) and gas (+2.0%). Core CPI inflation which excludes food and energy increased (+0.4%) in January and follows readings of (+0.3%), (+0.3%), and (+0.2%) over the previous months. The annual rate of core CPI inflation increased (+3.9%) as compared to (+3.9%), (+4.0%), and (+4.0%) over the previous months. Core goods prices fell (-0.3%) and core services prices rose (+0.7%). The shelter index increased (+6.0%) year over year, and was the largest contributor the total increase in Core CPI. Other indexes with significant increases over the last year include motor vehicle insurance (+20.6%), recreation (+2.8%), personal care (+5.3%), and medical care (+1.1%).

The Commerce Department reported advance U.S. retail and food services sales decreased (-0.8%) to $700.3B in January, this follows a downwardly revised (+0.4%) increase in December. Retail sales were up (+0.6%) year over year. Total sales for November 2023 through January 2024 were up (+3.1%) year over year. Retail sales are mostly goods and are not adjusted for inflation. Excluding sales at auto dealerships and gas stations, sales were down (- 0.5%). Sales declines were broad-based with negative readings coming from motor vehicles & parts (-1.7%), building materials (-4.1%), personal care (-1.1%), gas stations (-1.7%), clothing (-0.2%), sporting & hobby (-0.2%), miscellaneous retail (-3.0%), and internet retail (-0.8%). Restaurants, the only services category increased (+0.7%) in January and is up (+6.3%) year over year. Sales were up slightly at home furnishings (+1.5%), grocery stores (+0.6%), and department stores (+0.5%). Core retail sales, a measurement that excludes spending on autos, gasoline, building materials, and food services decreased (-0.4%) in January. December’s core retail sales were revised to show sales increasing (+0.6%) instead of (+0.8%).

The Labor Department reported that the producer price index for final demand, which measures the prices that producers pay for goods and services, increased by a seasonally adjusted (+0.3%) in January, marking the fastest pace in five months. This follows readings of (-0.1%), (-0.1%), (-0.4%), and (+0.2%). On an unadjusted basis, the index for final demand increased (+0.9%) for the 12 months ending January 2024. The index for final demand services rose (+0.6%), the largest increase since July 2023’s reading of (+0.8%). This follows three consecutive months of no change. A (+2.2%) increase in the index for hospital outpatient care was a major contributor to the rise in prices for final demand services. The index for final demand goods fell for the fourth consecutive month (-0.2%). This follows readings of (-0.3%), (-0.1%), and (-1.3%). Most of the decrease in prices for final demand goods is attributable to a (-1.7%) decline in prices for final demand energy, as the price of gasoline fell (-3.6%). Excluding food and energy, the so-called core PPI increased (+0.3%) for the month. This follows three consecutive months of a (+0.1%) reading. The core PPI is up (+2.6%) from a year ago. Excluding food, energy and trade services, PPI rose (+0.6%), the biggest increase in a year. This follows readings of (+0.2%), (+0.1%), and (+0.1%) over the previous months.

Upcoming Economic Reports:

Wednesday February 21 – FOMC Meeting Minutes (January)

Thursday February 22 – Existing Home Sales (January)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Black Stone Minerals (BSM)	Home Depot (HD)	Analog Devices (ADI)	Booking Holdings (BKNG)	Berkshire Hathaway (BRK.B)
Masonite International (DOOR)	Walmart (WMT)	NVIDIA (NVDA)	Intuit (INTU)	Warner Bros. Discovery (WBD)