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David Becker

U.S. stocks moved lower on Friday, as weak retail sales weighed on sentiment. Most sectors in the S&P 500 index were lower, driven down by Energy shares, Utilities bucked the trend. For the second consecutive month, retail sales were negative and more fragile than expected. The spending seen in mid-2020 was driven by a stimulus that is now on deck for the Biden administration. Producer prices rose in December and were buoyed by energy and food. The bid banks kicked off the earnings season on Friday. J.P. Morgan was the standout, but the financial sector fell as traders appear to be taking profits.

Retail Sales Fall

U.S. retail sales dropped in  December as lockdowns to battle the spread of COVID-19 undercut spending. According to the U.S. Commerce Department, Retail sales dropped 0.7% last month. November was revised down to show sales declining 1.4% instead of 1.1% as previously reported. Expectations had been for retail sales to be unchanged in December.

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Core retail sales were also lower. Excluding automobiles, gasoline, building materials and food services, retail sales tumbled 1.9% last month after a downwardly revised 1.1% decline in November. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have decreased by 0.5% in November.

U.S. producer prices increased in December. According to the Labor Department, U.S. Producer price index increased 0.3% in December after nudging up 0.1% in November. In the 12 months through December, the PPI rose 0.8%, matching November’s gain. Excluding food, and energy, producer prices increased 0.4%. The core PPI inched up 0.1% in November. In the 12 months through November, the core PPI gained 1.1% after rising 0.9% in November.

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JP Morgan Chase Beats

J.P. Morgan Chase reported profits of $12.14 billion or $3.79 per share, better than expected. The bank reported $29.22 billion for the quarter in revenue, up 3% from a year earlier, also topping analysts’ expectations for $28.67 billion. JPMorgan posted a record revenue of $119.54 billion, up 4% from 2019. The growth was powered by trading as clients were eager to raise capital and trade securities amid a troubled economy and record-high markets.

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