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By Carlos Guillen

After quite an impressive run in equity markets that had the Dow Jones industrial Average hitting record-high closing levels for four consecutive days, today it appears that the market's momentum has finally been broken as rather unfavorable economic data could not be brushed off by investors.

Quite discouraging today, and certainly putting pressure on stocks so far into the trading session, was that retail sales data showed that the consumer may be beginning to scale back on discretionary spending. According to the U.S. Census Bureau, retail sales during March increased year-over-year by 2.8 percent and decreased month-over-month by 0.4 percent, worse than the Street's consensus estimate calling for no change month-over-month. Excluding automobile related revenues, retail sales increased year-over-year by 2.0 percent and decreased month-over-month by 0.4 percent, worse than the Street's consensus estimate calling for no change month-over-month. While it was apparent that the consumer had been rather indifferent to paying 2 percent more in payroll taxes and in spite of ramping gasoline prices relative to the start of this year, now it is apparent that these effects are finally being felt. We should note that the Energy Information Agency recently revealed that the current average cost of gasoline is $3.78 per gallon, 45 cents higher than it was at the start of 2013. While many on the Street are also blaming the cold temperatures in March as part of the reason why a number of retailers posted tepid sales most recently, we are not so sure and believe consumers may continue to tap on the spending brakes in the short term.

Perhaps the most discouraging item of the day was that consumer sentiment not only landed lower than expected but also declined for the first time this year. The University of Michigan's Consumer Sentiment April result landed at 72.3, lower than the Street's expectation of 78.0, decreasing from the 78.6 reached in March. While consumers had been positive about the economy as they perceived an improving jobs backdrop and brushed off the administration's warning about an economic catastrophe following the cuts in federal spending, it now appears that the reality is finally becoming clearer; that is, higher taxes and higher gasoline prices.

Also discouraging was that consumers' outlook for the economy fell rather sharply, as reflected by the expectations index, which declined to 64.2, increasing from the 70.2 reached in March.

In all, despite the worse than expected data points, equity markets are down, but not that much, as reflected by the Dow losing just about 0.16 percent from yesterday's closing level; however, in relations to last Friday's closing price, the Dow is up almost 2 percent, making this week a fabulous week.