Thoughts on the market reaction to today's retail sales print
The retail sales data today certainly came in hotter than anticipated, and we saw the market's initial reaction with some volatility. It's interesting to watch how this narrative is now shifting, with some folks immediately jumping to higher-for-longer rates, while others are chalking it up to seasonal effects and resilient consumers. The $SPCX drop to 108.37 from its earlier high of 113.635 suggests a real re-evaluation happening, which makes sense given how much the market had priced in disinflation.
I'm not making any drastic moves yet, but this definitely puts a few more names on my watchlist that might be sensitive to rate hikes. Also, curious to see how the bond market digests this over the next few days. Could be an interesting setup.
The "seasonal effects" argument seems to pop up whenever data doesn't fit the desired narrative. While consumer resilience is a factor, attributing all of it to seasonality might be overly optimistic given the sustained inflation pressures.