US DATA: Chicago CARTS Points To Strong Core Retail Sale Dynamics In October
The Chicago Fed's final CARTS estimate for October ex-autos/parts retail sales is for 0.39% M/M growth, up from 0.30% they estimated for September.
- Of course we haven't yet gotten the Census Bureau's official September data due to the federal government shutdown, and Friday's advance release for October is almost certain to be postponed.
- In the meantime we have other proxies for retail sales growth over the last couple of months and for the most part they've been solid, including CARTS and Redbook weekly sales.
- Though the ex-autos sales figures would represent a slowdown from 0.66% in August, and vehicle sales look to have fallen sharply in October (due largely to expiring government EV incentives) which will depress headline sales, "core" retail sales continue to grow at an elevated rate going into Q3.
- If the CARTS estimates are correct, then ex-autos retail sales grew at a 6.3% quarterly (3M/3M) annualized rate in October, which would be the fastest since October 2023 and a pickup from the 3.5% recorded in June (Q2).
- That's in nominal and not real terms, but suggests no discernable letup in consumption overall, even when inflation-adjusted.
- As the chart below shows, ex-autos are a good proxy for the GDP-input Control Group retail sales (which exclude auto sales, the largest single retail category), and suggests some of the strongest growth in years in that category continues.
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EQUITY OPTIONS: Long Dated OTM Estoxx Put Spread
SX5E (19/12/31) 3000/2800ps, bought for 21 in 6k.
GILT TECHS: (Z5) Bullish Theme
- RES 4: 92.72 1.000 proj of the Sep 3 - 11 - 26 price swing
- RES 3: 92.37 High Aug 11 (cont)
- RES 2: 92.14 0.764 proj of the Sep 3 - 11 - 26 price swing
- RES 1: 92.06 High Aug 14
- PRICE: 91.93 @ 14:47 BST Oct 14
- SUP 1: 90.90 20-day EMA
- SUP 2: 90.26/89.94 Low Sep 26 / 76.4% of the Sep 3 - 11 correction
- SUP 3: 89.36 Low Sep 3 and a key support
- SUP 4: 89.00 Round number support
Gilt futures rallied sharply higher on Friday confirming a resumption of the recovery that started Sep 25. Today’s gap higher strengthens current conditions and price has cleared key resistance at 91.82, the Sep 24 high. The breach strengthens bullish conditions and opens 92.14 next, a Fibonacci projection. Price needs to trade below support at 90.26, the Sep 26 low, to reinstate a bearish theme. First support lies at 90.90, the 20-day EMA.
SILVER TECHS: Off Its Intraday High
- RES 4: $53.546 - Today’s intraday high
- RES 3: $52.821 - 76.4% retracement of the Oct 14 high-low range
- RES 2: $52.010 - 50.0% retracement of the Oct 14 high-low range
- RES 1: $51.199 - 23.6% retracement of the Oct 14 high-low range
- PRICE: $50.978 @ 14:48 BST Oct 14
- SUP 1: $49.677/46.791 - Low Oct 10 / 20-day EMA
- SUP 2: $43.308 - 50-day EMA
- SUP 3: $41.135 - Low Sep 17
- SUP 4: $40.404 - Low Sep 4
Trend signals in Silver remain bullish. The metal has traded to a fresh cycle high today, however, price action is volatile and silver is off its intraday high. Recent gains have resulted in a move above a major resistance area around the $49.00-$50.00 region. This marks a high point from Jan ‘80 and Apr ‘11 and $50.00 represents a key psychological level. A clear break of this zone strengthens a bull theme. Support to watch is $46.791, the 20-day EMA.
