Oh My! Oil And Retail Sales Down – Bring On The Fed

I received a simple but relevant question re: my take on the oil market yesterday. My answer is a bit bold (I reach for the empirical with economics), but today’s oil-market drop suggests I might be on the right track.

Q: When is your oil analysis (which I share) going to be reflected in the stock market?

A: My guess is this week and next we will see a mostly downward trend. The vested oil interests have been propping up the price, but with the Saudis, Iraqis, Venezuelans, Brazilians, and Russians running out of cash, and Iran and Libya pumping madly to catch up, it is only a matter of time before simple economics force oil producers back to the original reason for increased pumping during a glut -- market share is more important than price.

Now, can we move onto the next boogeyman for the market?

  • U.S. retail sales fell less than expected in February, but a sharp downward revision to January's sales could reignite concerns about the economy's growth prospects.

Is the above any reason to think the US economy is headed south? Consider the facts …

  • Average US Retail Sales Growth Rate: 4.16%
  • Current US Retail Sales: 393.59B.
  • Value Previously: 394.76B
  • Change From Previous: -0.30%
  • Value One Year Ago: 383.42B
  • Change From One Year Ago: 2.65%

Empirically speaking, and considering it not unusual that US retail sales drop in the cold of winter, I say let’s move onto beating the dead Fed horse …