A short note on yesterday’s retail sales data.
Seasonal adjustment due to things like Black Friday sales, Cyber Monday, have made reading the data (parsing the trend) from November to Jan harder than normal.
February’s print should be fairly clear, and yesterday’s month on month print of 0.2% was in line with consensus, but, importantly, shows the fairly clear trend of a slowdown.
This slow down has to happen, given the repricing of mortgage rates. And in level terms, such a fall (a return to trend line) could be quite significant.
Nothing to change our view here, we are underweight the pointy parts of the cycle, and underweight consumer discretionary in particular.
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