Solid execution with big upside in revenues from INTC and JPM provides an interesting backdrop to the Retail Sales data today. Intel has benefited from inventory rebuilding, especially ahead of the Windows 7 launch (replacement cycle hopes) and netbook sales. The question of sustainability will be sell through to the end consumer and the Retail Sales data will be a good measure of final demand. JPM’s Dimon said “while we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue.” Stability is certainly the welcome word especially compared to a few quarters ago. ABC confidence fell 3 points to -48, a 4 week low as the Personal Finance component fell to a 3 month low. The MBA said purchases fell 5% as tax credit hangover is a looming possibility if it doesn’t get extended. Refi’s were flat as the average 30 yr mortgage rate rose back above 5%. The $ index is at a fresh 14 month low notwithstanding the positive earnings reports. Sept new bank loans in China rose by 516.7b Yuan, almost 77b above expectations and it’s the fastest pace in 3 months. YTD bank loans now total 8.65t Yuan, well above 4.9t seen in all of 2008. China’s Sept trade surplus unexpectedly fell led by a much smaller than expected drop in imports. Export growth also fell less than expected.
II: Bulls 47.2 v 48.9 Bears 26.4 v 24.4
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