The Morning View: October 16, 2020

Announced this morning, Retail Sales for September increased 1.9%, more than double what was expected. Strength occurred in Clothing & Accessories stores as well as Sporting Goods, Book, and Hobby stores. Meanwhile, Electronics & Appliance stores were weak. The Control Group, which excludes sales for food, autos, building materials, and gas stations, increased 1.4% in September, also much larger than expected. Overall, a strong report in September, following weaker data in months prior. With clothing and book retailers exhibiting strength, individuals likely spent on back to school items in the month as many school systems reopened a bit later than usual given the impact of COVID-19. In addition, the report should give confidence to the prospects of economic growth given consumer spending is a large portion of GDP. In all, bond yields moved higher following the report and equity futures are higher as we head into the market open.

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