Vital Statistics:
Stocks are flat as earnings continue to come in. Bonds and MBS are flat.
Retail Sales rose 0.4% in December, according to the Census Bureau. This was a decline from November, and was a touch below expectations. On a year-over-year basis retail sales rose 3.9%. Since this number isn’t adjusted for inflation, retail sales rose modestly.
If you strip out gasoline and vehicles, retail sales rose 0.3%. For the full year 2024, retail sales rose 3%, which means retail sales on an inflation-adjusted basis fell for the year.
Yesterday’s CPI report was reflected in the Fed Funds futures, which moved a bit more dovish. The December 2025 futures now see a 19% chance of no rate cuts this year, a 36% chance of 1, and 29% chance of 2.
Initial Jobless Claims increased to 217k last week.
JP Morgan reported better than expected earnings yesterday. Book value per share rose 11%, where EPS rose 58%. Jamie Dimon said: “The U.S. economy has been resilient. Unemployment remains relatively low, and consumer spending stayed healthy, including during the holiday season. Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro growth agenda and improved collaboration between government and
business. However, two significant risks remain. Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II. As always, we hope for the best but prepare the Firm for a wide range of scenarios.”
Mortgage origination increased smartly compared to last year, rising to $12.1B compared to $7.2 billion in the fourth quarter of 2023.
