The holiday shopping season was weaker than expected. The December retail sales number shows a decline of 0.7% compared to the expected growth of 0.05%. The weakness came amid a resurgence in COVID-19 cases over the holidays. Excluding autos and fuel, the decline was even worse, down. 2.1% over the month. The recent surge in oil positively contributed to growth in this area. Year-over-year, retail sales are up 2.9%.

Business inventories picked up in November. The growth of 0.5% was better than the expected 0.40%. Business inventories are considered a leading indicator. If businesses are stocking up, the thought is they expect an increase in business.

The first reading for the Michigan Sentiment Indicator for January is out. Good consumer feelings on the economy continue after the significant drop in April 2020. There have been positive moves and contractions since then, but the overall trend is positive.

Jobless claims from the week ended on Jan. 2 were higher than expected. Claims were filed from 5.3 million people. The forecast was for 4.85 million claims. Companies having to limit operations due to the virus has contributed to the increase in claims.

The fourth quarter 2020 earnings season has begun! So far, 10% of S&P 500 companies have reported for the period. Earnings growth is better than expected. The reported growth of 3.67% is 20% better than expected. The Financials sector surprised to the upside in the quarter. Some banks benefited from making conservative estimates for loan losses. Recorded earnings growth for the sector so far is 16.98%. This growth is 27% better than forecasted. The consumer discretionary sector is also putting up a strong showing with reported growth of 18.66%. Growth in Industrials and Energy have been weaker than expected.

Sales growth is also up for the quarter. The growth of 1.68% is 2.6% better than expected. The revenues of Communications Services companies were up 21.53%. Growth in Consumer Staples has been strong at 10.44% growth.

The price of oil continues its increase, with WTI Crude up 1% to $52.29 bbl. This appreciation contributes to the increase of 8% we have seen since the beginning of the year. Increasing demand for the commodity and production cuts have contributed to the surge in pricing for the commodity.

Source: BTC Capital Management, Bloomberg LP, Ibbotson Associates, FactSet.
The information provided has been obtained from sources deemed reliable, but BTC Capital Management and its affiliates cannot guarantee accuracy. Past performance is not a guarantee of future returns. Performance over periods exceeding 12 months has been annualized.

The information within this document is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Statements in this report are based on the views of BTC Capital Management and on information available at the time this report was prepared. Rates are subject to change based on market and/or other conditions without notice. This commentary contains no investment recommendations and you should not interpret the statement in this report as investment, tax, legal, and/or financial planning advice. All investments involve risk, including the possible loss of principal. Investments are not FDIC insured and may lose value.