Russ Koesterich, CFA and BlackRock's Chief Investment Strategist, thinks the January
He's going by Redbook Weekly Retail Sales data, which measures how much stuff Americans are buying by looking at weekly same-store sales at chain stores, discounters, and department stores. From his post on BlackRock's iSharesBlog:
Based on this index, which is admittedly narrow, retail sales have been negative for five consecutive weeks. While the drop in sales has been modest, it has been consistent week after week. It leaves open the possibility that the new tax hike hitting consumers’ paychecks – remember it has impacted most workers and is expected to subtract roughly 1.5% from personal income this year – could send the headline retail sales number even lower than the consensus estimate of 0.1% growth from December.
Koesterich warns that if the retail sales number does get slammed, it would make stocks more vulnerable to a sell-off.
All eyes are on today's retail sales report to see just how much the recent payroll tax hike has hit consumer spending.
Here's what the Redbook Index looks like: