Retail Sales Down | Daily Market Update

Friday, January 15, 2021

Top Story

Retail Sales Worse Than Expected

Retail sales in the United States declined 0.7% month over month in December, below all but two of the 70 forecasts in Bloomberg’s consensus survey (US Census Bureau). The weak retail sales data reveals the effects of increasing restrictions in Q4 2020 to curb the spread of COVID-19. This may embolden policymakers when they begin debating President-elect Joe Biden’s $1.9 trillion stimulus proposal.

Daily Insights

Stocks trading lower as earnings season kicks off

  • US stocks opened modestly lower with the Nasdaq
  • European markets are firmly lower in midday trading.
  • Asian stocks were mixed overnight.

President-elect Joe Biden releases details of $1.9 trillion stimulus proposal

President-elect Joe Biden’s $1.9 trillion stimulus proposal, the “American Rescue Plan,” was released Thursday evening and includes:

  • An additional $1,400 in direct payments to eligible recipients
  • Enhanced unemployment benefits of $300 to $400 per week
  • A national $15 per hour minimum wage
  • Rental assistance and an eviction moratorium
  • Increased support for vaccines and testing, including $20 billion for a national vaccination program

The current proposal is most likely an “opening bid” rather than a proposal that can pass with bipartisan support. The final version will be worked out by Congress and will likely be followed by a “phase 2” package this summer.

5 charts on the blue wave

One of the top questions we’ve received lately is what could be the impact on the economy and investments after the Democrats won the White House and both chambers of Congress. Today on the LPL Research blog, we use charts to take a look. For instance, the Senate is split 50/50, but the House majority is only 11 seats, the smallest since 1876. Historically—stocks have performed just fine in the first year of a new Democratic president.

MLK Jr. Day observed January 18

LPL Financial along with the stock and bond markets will be closed Monday, January 18, in observance of Martin Luther King, Jr. Day.

Technical update

US markets are trading slightly lower on the week as they digest the all-time highs from the week prior.

  • Cyclical value rotation continues to be the main story in markets, as the financials sector broke out to new all-time highs, while the energy sector trades at its highest level since June.
  • The first level of tactical support for the S&P 500 Index can be found at 3630 on any potential pullbacks.

COVID-19 news

The United States reported 229,000 new COVID-19 cases Thursday, down 18.3% from the week prior, suggesting that the post-holiday surge may be behind us (source: Johns Hopkins).

  • Hospitalizations, a lagging indicator, are also beginning to fall.
  • Cases in Western Europe are still rising, although the data is skewed by Spain (source: COVID Tracking Project).

LPL Research in the Media

LPL Research Chief Market Strategist Ryan Detrick recently talked about the 10-year Treasury yield on Fox Business.

LPL Research Equity Strategist Jeff Buchbinder was quoted in MarketWatch on the stock market and politics.

New Street View Video Sets Positive Tone

The stock market has started off 2021 surprisingly well, and LPL Research Chief Market Strategist Ryan Detrick says this bull market is alive and well. “Surprises to Start 2021,” the first Street View video of the New Year, is approved for clients.

What 2021 Policies Could Mean for Your Investments

In this week’s Market Signals podcast and video, LPL Research talks about 2021 policy updates and the possibilities of higher taxes and more regulation, more stimulus, higher Treasury yields, and better stock performance in 2021.



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