The Daily Difference: Market Update January 13, 2014

Here's what's on the docket this week: Tuesday, January 14

• Retail sales will be released at 8:30 ET, an hour before the market opens. Although retail sales have seen month over month growth the last few months, the largest contributor was autos. The consensus if for 0% growth in December; it is likely a negative numbers will hid mid cap retail stocks hard. Expect a lot of volatility in this space tomorrow as we get a better read on holiday sales.
• Business inventories will be closely watched. Last quarter’s GDP number was impressive, but the majority of the growth was due to a buildup in inventories, not final sales. A combination of expanding inventories and low retail sales could be bad for the market when coupled with last week’s disastrous jobs number. Of course, large beats to the upside could certainly provide some momentum for the markets

Thursday, January 16

• Jobless Claims are expected to come in at 327K. This number will be closely watched to determine if last week’s payroll number was an aberration or the start of a trend.
• Consumer Price Index: If this number is still significantly below 2% and under consensus (0.3% m/m), expect the markets to consider if tapering will be temporarily halted…..

Friday, January 17

• Housing Starts: although this number is extremely volatile (22.7% in November vs. 1.8% in October), the starts and permits numbers both serve as leading indicators and will be closely watched due to housing’s significant contribution to the recovery.