M Notes: Tue, 1-21

LAST WEEK:

Markets:  They rebounded last week.  Why?  Less Fed fears.  

S&P roller coaster last week:  Up, Up, Up significantly, Down, and Up a lot.  

Fed Balance Sheet:  $6.854 Trillion.  

Fed Beige Book:   Overall, economic activity moved up slightly/moderately across the twelve Districts in late November and December.   The Cleveland District grew modestly in that timeframe.  Thoughts towards the months ahead were hopeful.  And consumer spending increase modestly (higher than expected).  

Housing:  Starts were up +15.8% in December, but were down -4.4% Y/Y.  

Industrial production:  It was up +0.9% in December (easily beating the +0.3 consensus).  

Inflation:  The Consumer Price Index (consumer Inflation) came in as expected, rising from 2.7% up to 2.9% Y/Y in December.  But Core Inflation (no food or energy in the calculations) dropped a tick from 3.3% down to 3.2%.  Markets loved that and were off to the races Wednesday.  The Producer Price Index (wholesale Inflation) rose, as expected, from 3.0% up to 3.3% Y/Y in December.  Core wholesale inflation rose a tick from 3.4% up to 3.5%.  

Jobless claims:  The weekly number came in at 217,000.  The four-week average came in at 213,000.

National Debt:  $36.378 Trillion.  

Retail sales:  Coming off of a +0.7% gain in November (revised up to +0.8%), Retail Sales were up +0.4% (missing the consensus of +0.5%).  Retail sales are up +3.9% Y/Y.  

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THIS WEEK:

Focus of the week:  With a light economic data week most of the Focus should be on the new Administration.   This first week might give us an idea of whether the Trump Trade will continue.

Calendar:   Jobless claims (Thu); and existing home sales (Fri).    

Holiday:  U.S. Markets were closed on Monday in observance of the Martin Luther King holiday.