- What really drove the retail sales decline; and
- the run-up in industrials.
Block Out the Politics Posted at 12:02 p.m. EDT on Friday, April 12 Wealth. Wealth springs eternal, and it comes in all shapes and sizes. This morning we are seeing a decline in oil, and when I see that I think "wealth." A decline at the gas pump can make up for this payroll tax hike that I keep hearing people talk about. The appreciation of real estate can make up for the payroll tax. The refinancing of mortgages can make up for the payroll tax. The advancements in the stock market can make up for the payroll tax.
I point all of these out because, when Friday saw a 0.4% March decrease in the retail sales number -- the worst decline since last June -- I heard immediately that the culprit was the end of the payroll tax holiday. I think that's nonsense. I actually think the cold weather played a bigger role. Why? Go back to what Manny Chirico, CEO of PVH (PVH - Get Report), said on "Mad Money" about the company's March numbers. He said the weather played total havoc with them. Remember how retail works: In March you are showing swimwear, clothes that are lighter in fabric -- nothing warm at all. But when it is 20 degrees colder in much of the heavy-consumption portions of the country, that can really hurt -- and I think it did.
That's the reason the retail stocks keep hitting new highs despite the weak aggregate numbers. Plus, the companies that did "Squawk Box" on CNBC Thursday made it very clear that things improved as the month went on, and that the early part of April's looking very good. In fact, the only retailer I heard bemoan the payroll tax increase was Family Dollar (FDO), which was also the only retailer that truly disappointed in its numbers.