Retails sales in the US increased by 0.2% in December, the Commerce Department revealed today, despite a drop in automobile sales. Sales for automobiles and associated parts – always a volatile component – plunged 1.8% straight after a 1.9% rise in the previous month, and cutting this component out of the equation yields growth of 0.7%.
This bodes well for fourth-quarter GDP and has consequently given a lift to stocks in New York today.
By early afternoon on Wall Street, the S&P 500 had risen close to 1% at 1835.8 and the NASDAQ 100 gained 1.8%. The Dow’s performance was not quite as good as these other leading benchmarks, but it has still made solid progress today, climbing 0.52% to 16,343.
Dow component JP Morgan announced a hefty fall in profit for its last quarter, with a 7.3% drop in earnings from the same quarter in 2012. Profit was hurt by significant litigation costs and the bank’s investment arm suffered a large loss from amending the value of some assets.
Wells Fargo reported a 11% rise in quarterly earnings. We will hear from the other major US banks this week, including Bank of America, Citigroup and Goldman Sachs.
The combination of the upbeat retail sales report with data from Japan showing the nation’s current account deficit widening to a record amount in November has sparked a sharp rise in USD/JPY, with the currency pair jumping more than 1%, reversing a three-day rally for the yen.