GLOBAL DEFLATION

Retail Sales for the month of December shocked The Street to the downside.

via the Wall Street Journal:

U.S. sales at retailers and restaurants decreased a seasonally adjusted 0.9% in December from a month earlier, the Commerce Department said Wednesday. That was the largest monthly decline since January 2014. Excluding gasoline sales, purchases fell 0.4%, while spending declined 1% when removing the volatile autos category.

Economists surveyed by The Wall Street Journal had predicted overall sales to fall 0.2% and sales excluding autos to also decline 0.2% in December.

But don’t worry, because supposedly European QE is coming. According to experts, it will involve sending cash-laden Portuguese housewives to American shopping centers with giant SUVs to pile discretionary purchases into. I’m told they will be comely lasses as well. Look sharp, gentlemen!

This retail sales disappointment, coupled with a big earnings miss by JPMorgan, has investors blowing out of stocks this morning. Perhaps it should – not sure why US stocks “deserve” to be within 3% of all-time record highs if lower oil doesn’t translate to enough top-line growth and retail spending in the eyes of the consensus. In the meanwhile, the ten-year Treasury’s yield is now under 1.8%, well on it’s way to zero. Perhaps we’ll soon join the growing list of countries with negative interest rates on their bonds: Germany, France, Austria, Belgium, The Netherlands, Finland, Switzerland, Japan

This week I asked the question of whether or not the market’s participants would be able to “see through” oil’s hit to corporate profits this season. Are we getting our answer?

In the meanwhile, here are a list of things that are now free thanks to the global deflationary meltdown, so feel free to use as much as you can or stockpile:

Crude oil
Copper
Jet fuel
Steel
Hugs
Iron
Coal
Natural gas
Newspaper content
Gasoline
Shipping at Amazon
Your first three months at Bally’s Total Fitness*
Borrowing rates, if you’re a bank
Borrowing rates, if you’re a sovereign government
Pandora with minimal commercial interruption
Non purpose loan rates
LIBOR
Margin loan rates
Macroeconomic commentary
Wheat

So, you know, have fun.

*limited time only