Some pertinent updates

Here are some pertinent news stories…

• U.S. retail sales were up 0.6% in June, the second consecutive monthly rise. Many categories were down slightly, but many categories were up slightly, too. Interestingly, most news outlets, despite the fact that retail sales were up are emphasizing that if you exclude spending on fuel and automobiles retail sales were actually down 0.2%. Yet, if you were to exclude some of the down categories, such as furniture retailers and garden suppliers then the number would have been more up. The fact is that you can’t perfectly parse the numbers.
• Producer prices rose 1.8% last month. These are the prices that businesses pay for their raw materials. This is a good sign because there have been rampant, unsubstantiated, fears that deflation might settle into the economy. So many folks are looking for signs of price increases. Et voila.
• Goldman Sachs, the first major investment bank to report this quarter, handily beat earnings estimates. Earnings per share were $4.93 per share vs. $4.58 per share a year ago. The results were after a massive $426 million dividend pay back to the Fed’s TARP bailout program. If we exclude that payback to get a better sense of what Goldman’s recurring earnings are then we have $5.71/share. Meanwhile, the consensus earnings estimate from analysts was $3.48/share. So Goldman’s performance is clearly phenomenally better than expected.

These are all good numbers. Let’s keep our fingers crossed that even more on their way.

Jason