After a disappointing holiday season, U.S. consumer spending picked up steam in January 2021, as retail sales jumped 5.3 percent from the December total on a seasonally adjusted basis. According to advance estimates published by the U.S. Census Bureau on Wednesday, retail and food services sales amounted to $568.2 billion in January, as consumers flocked to stores to spend their $600 stimulus checks. The January spending spree puts retail sales above January 2020 levels, although it needs to be noted that some retailers are still far off their pre-pandemic trajectory.
Due to the widespread lockdown instated to contain the spread of COVID-19, retail sales had plunged 14.7 percent in April, following an already unprecedented 8.2 percent drop in March. To put this in perspective, the highest drop prior to March 2020 had occurred in November 2008, when retail sales declined by less than 4 percent at the height of the financial crisis. As the following chart shows, retail sales have very rarely dipped significantly in the past, with the financial crisis being the most notable exception of the past three decades.
This chart shows monthly retail and food services sales in the U.S. since 1992.
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Last week’s selloff did less damage than it may have felt like. The drop stopped in the area of 3 crossing uptrend lines, ranging in length from short term to long term. Here’s what would tell us whether the uptrend is still in force, or signal that something evil this way comes.
I have added 8 new stocks to the swing trade chart pick list, including 2 shorts.
These reports are not investment advice. They are for informational purposes, for a broad audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance.