Will retail confirm a resilient economy?
Economists expect December retail will rise 0.6% month-over-month, slightly less than the robust 0.7% increase in November. Strong auto sales and solid consumer spending during the holiday season will likely drive the numbers. However, any significant deviation could impact market sentiment, especially as traders assess whether inflation has truly peaked.
Morgan Stanley expects an overall increase in retail sales of 1.0%, with a 0.6% increase in sales of the control groups, a crucial input to GDP. Goldman Sachs expects core retail sales to rise 0.4%, citing steady consumer momentum despite falling gasoline prices. A weaker report could reignite concerns about a slowing economy, especially ahead of Trump’s inauguration.
How will Trump’s policies shape the markets?
Trump’s inauguration on January 20 adds another layer of uncertainty. Market participants are wary of his tariff policy and its inflationary impact, which could put pressure on bond yields and stock valuations. However, deregulation plans have supported sectors such as banking, cryptocurrencies and private prisons since his election.
Investors will closely analyze Trump’s inaugural address for clarity on trade and fiscal policy. Signals of immediate tariffs could worsen market sentiment, while growth-enhancing measures such as tax cuts could support bullish momentum. With bond yields already rising to multi-month highs, traders should remain cautious about further inflation-driven volatility.