BTM Chain Store Sales -2.5%
Econoday reports: A foot of snow on the Eastcoast spoiled the week's shopping results. The BTM-UBSW retail chain-store index fell 2.5 percent in the week ended December 6, its sharpest decline in three years. Customer traffic was sharply lower in the effected areas, leading to a marked pick up in online shopping. The report will raise fresh concern over the success of the holiday shopping season, a minus for stocks and a plus for bonds.
NOTE: The BTM-UBSW report will not cease publication after all, becoming instead the BTM-UBS report now affiliated with the International Council of Shopping Centers.
Redbook -1.0%
Econoday reports: The Redbook reported a 1.0 percent decline in the pace of sales at the nation's discount and department stores in the week ended December 6 compared to the month of November. The year-on-year pace in the week, thanks to a weak comparison, was a positive 3.2 percent but still down from a 4.4 percent pace in the prior week. Results were hurt by heavy snow on the Eastcoast.
Wholesale Inventories +0.5%
Econoday reports: Wholesale trade inventories rose 0.5 percent in October, up from a revised 0.3 percent rise in September (originally a 0.4 percent gain). The rise points to inventory restocking, consistent with stronger economic growth. Wholesale sales were up 2.0 percent, pushing down the inventory-to-sales ratio to a record low of 1.18 vs. 1.20 in September. The declining ratio suggests that wholesalers continue to get more out of proportionately decreasing levels of inventory. Wholesale auto inventories rose 2.7 percent in the month with sales up 0.5 percent. Wholesale petroleum inventories fell 0.9 percent with sales up 1.4 percent.
4-Week Treasury Bill Rate 0.895%
Econoday reports: The bid-to-cover was an extremely strong 3.05 vs. 2.30 last week, a reflection of the auction's lower size.
Federal Funds Rate Unchanged 1.00%
Econoday reports: To no one's surprise, the FOMC voted unanimously to leave the federal funds rate target unchanged at 1 percent. The big question of the day was whether the Fed would delete the phrase "for a considerable period" from the statement. As it turns out, they left it in! This may be negative for the dollar, although it may be viewed more benignly by stock and bond market investors.
There were some changes (since the last meeting) to the Fed's post-FOMC statement. They now indicated that the risk of falling inflation was almost equal to the risk of rising inflation. Until now, Fed officials had worried that the risk of disinflation far exceeded inflation acceleration. The upside and downside risk of the economy were deemed roughly equal. According to the statement, Fed officials believe that the labor market is improving modestly and economic growth is brisk.
Judging by the psychotic whiplash in the bond market as the statement was analyzed, WSJ.com summed it up just right:
The Fed maintained its plan to keep short-term interest rates at a 45-year low for a "considerable period." But policy makers said the risk of deflation has "diminished" and delivered an upbeat economic assessment, perhaps laying early groundwork to raise rates.
03.12.09 16:57 #