Although the major equity indices failed to reach new highs during this session, they aren’t far off from achieving this goal. In particular, the Dow Components McDonald’s (MDC), Chevron (CVX) and Exxon-Mobil (XOM) all heavily weighed down the index today. However, the culprit for the selloff today was China and Japan as both posted some disappointing economic data. Japan's economic contraction in July-September was deeper than initially expected, according to revised data that backs up the Prime Minister’s decision to delay a second sales tax hike. The annualized contraction in Japan was 1.9%, not 1.6% as previously thought. In addition, China's imports fell unexpectedly in November while export growth slowed, adding to concerns that the country could be facing a sharper slowdown. Domestically, there was a significant change in the level of consumer credit, which was released Friday afternoon.

Overall, consumer credit increased by $13.2 billion in October, but much to the disappointment of retailers, the gain was centered on non-revolving credit which increased by $12.3 billion on the typical mix between auto financing and student loans acquired by government from private lenders. Revolving credit, which includes credit cards, increased by only $900 million in the month, this was down from a $1.4-billion gain in September. Once again, the slow growth in revolving credit is a reflection of slow growth in hourly wages, which is preventing consumers from being willing to shop with cards.  However, we note that overall credit usage has increased now for the last 11 months by roughly $10 billion. Typically, consumer credit goes through substantial revisions before the final number is released so any future revision is unlikely to alter the current growth trend. Nevertheless, consumer credit has increased by an average of $18.1 billion each month in 2014. Below is a chart of the total changes in consumer credit year-to-date.