There were three big economic reports this week:
- Retail Sales (RSXFS): +1.26% m/m
- Industrial Production (INDPRO): -0.11% m/m
- Producer Prices (PPIACO): -1.3% m/m
Mostly, producer prices = energy, which is down from peak. Retail sales were strong, except for clothing which was flat. Industrial production was basically flat also. I have a pair of models (INDPRO, PPIACO) and both of them are now in downtrends. Here is the INDPRO model; the blue projection line is well below zero. When INDPRO tips over, that is generally bearish for the economy.
Crude was hit hard this week, falling 8.85 [-9.95%] to 80.11. Crude fell four days out of five. My hoped-for post-election crude oil rally has totally failed to materialize. Perhaps it is all the new talk of layoffs, which (for whatever reason) the Oligarchy-owned “essential business” didn’t say much about until after the midterms had safely passed. The plunge through the 50 moving average MA was definitely a bearish signal.
Weekly pillaging of the SPR continues – four million barrels last week. Rather than stopping post-election, the drain appears to be increasing. There are 392 mbbls left, which will last us another 98 weeks. What’s the current “emergency”? Who knows. Maybe the emergency is: the U.S. remains a superpower, the Biden-Handlers are not pleased, and that requires draining our “emergency” reserves, so as to magnify the negative impact of any future oil crisis. This makes about as much sense as anything else this group is doing.
Equities inched lower, losing 0.69% on the week. Crappy debt moved lower too, dropping 0.15%. SPX may have run into resistance at its 200 MA line, much as it did a few months ago. The sector map was bearish: discretionary led lower (-2.91%) along with REITs (-1.81%), while staples (+1.55%) and utilities (+1.12%) did best. That is a mostly-classic bearish sector map. These are hints of risk off.
The buck may be putting in a low; this week it rose +0.66 [+0.62%] to 106.83. The buck spent most of the week just chopping sideways. Call the action mildly bullish. It does seem to have found support at the 200 MA.
by cmartenson 
