Lots of disappointing headlines today including Retail Sales for June.  I don’t think macro or micro narratives have changed and more than likely this report will be revised higher at some point.  There are realities in the retail space such as the Internet soaring as department stores flounder.  On that note, auto sales were better than advertised, while laggards clothing and electronics are acting better.  As I mentioned this morning, there are signs that deflationary forces are hurting retail as well.

CPI for June saw sharp price declines:

• Energy -1.6%
• New Vehicle -0.3%
• Used Vehicles -0.7%

The market is on autopilot, but early strength has stalled after the latest read on consumer sentiment was less than expected.  I’ll go into details on Monday about the fading hopes for strong growth and how it is tied into incompetent leadership among Republicans in Congress.

One thing I stress is to also look at the numbers and trends away from consensus which can often take good news in disappointment and bad news in a windfall.  All the data out today along with earnings showed a stark year to year improvement.

The economy is doing better and can pick up traction without Congress, although the idea of 4% or 5% growth without tax relief is farfetched and growth that can underpin a higher stock market isn’t farfetched.