One criticism of the impressive Trump stock market rally? Economic data fueling investor exuberance is simply “soft data.”
Bearish naysayers claim while U.S. consumer confidence is at 15-year highs, this optimism hasn’t translated into tangible economic growth. Well, that’s not entirely true. This week, U.S. Consumer Confidence hit 114.8 for the month of February, a new high versus 111.6 the prior month.
More importantly, that was followed up by headline ISM Manufacturing and New Orders rising to 31 month and 39 month highs, respectively, according to Hedgeye CEO Keith McCullough.
Meanwhile, sales backlogs saw their biggest sequential increase in 49 months, rising to their highest level in three years. On the news, the S&P 500 notched yet another all-time high yesterday. That brings the post-Election stock market rally to +12.4%.
Furthermore, year-over-year growth in both retail sales and inflation are near or above 5-year highs.
- Retail Sales: The year-over-year growth rate in retail sales hit 5.6%, a level not seen since March 2012. Digging deeper into the report, the retail sales “control group” (a good proxy for the input into the consumption component of US GDP) accelerated to +4.0% year-over-year growth for the month of January versus +3.4% growth in December.
- Consumer Price Inflation: Core inflation just hit the highest level in 5 years. CPI accelerated to +2.5% year-over-year in January versus +2.1% in December. Inflation has now accelerated for the 6th consecutive month.
Talk about hard data!
