Do not get too excited!

Retail sales, published today, sent the markets (stocks and bonds) soaring.
Now, look at the chart shown here (click on the graph to enlarge) and what do you see?
Retail sales after inflation have been slowing down and are now growing at a zero (yes, zero) percent pace year on year.
This is the reason stocks jumped, financial stocks soared, and bonds rose. Why?
The markets assumed the Fed is bound to lower short-term interest rates because the economy is slowing down to a pace close to a recession (see above chart).
The problem remains the weakness of the dollar (see my blogs below on this subject).
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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977