US Markets sold off following weak consumer spending data as the expected growth in consumer discretionary spending didn’t materialize in the fourth quarter.  Also hurting stocks was a weaker than expected first time claims for unemployment number on Thursday and several weak earnings reports.  Stocks rose on Friday on the heels of strong consumer sentiment and comments from the International Energy Agency that growth in oil production will slow, raising hopes that there is some light at the end of the tunnel for energy stocks.  In my opinion this is scant data to justify the bounce we saw on Friday but following five consecutive down days the market was ripe for some kind of a bounce.  More telling will be the large number of earnings announcements in the upcoming week.

In particular this week:

• China’s exports rose much faster than expected by 9.7% and imports fell 2.4% in December from a year ago.
• The Commerce Department reported that US retail sales fell 0.9% in December.  Excluding gasoline, retail sales still fell 0.4%.  For the year retail sales gained 4.0%, the smallest increase since 2009.  November sales previously reported at 0.7% gain was revised down to 0.4%.  October sales were also revised from 0.5% to 0.3% gain.
• The Labor Department reported that import prices fell 2.5% in November and 5.5% for the entire year.  Excluding gasoline, import prices rose 0.1% in December.
• The Labor Department also reported that initial claims for unemployment increased 19,000 in the prior week to a seasonally adjusted 316,000 much worse than expected.  The four week moving average also rose 6,750 to 298,000.  Initial claims had been below 300,000 since July.
• The Federal Reserve reported that US Industrial Production decreased a seasonally adjusted 0.1% in December from November.  Capacity utilization also fell from a revised 80.0 in November to 79.7% in December.

• The University of Michigan reported that Consumer Sentiment rose to 98.2 in January from 93.6 in December.