What Happened

  • Retail sales beat expectations, pointing to resilient consumer demand.
  • Treasury yields climbed and the dollar firmed on the data.
  • Cyclicals led while growth stocks lagged.
  • Credit spreads remained tight, showing steady risk appetite.

What It Means

  • Strong demand reduces the urgency for quick rate cuts.
  • Higher yields reintroduce pressure on long-duration equities.
  • Tight credit spreads suggest investors are still comfortable with risk.

What I Think

  • I expect more two-way trade as data points conflict.
  • The best setup is still quality cyclicals with pricing power.
  • I will trim duration if yields push higher from here.

Market Terms

  • Retail sales - Monthly measure of consumer spending.
  • Pricing power - Ability to raise prices without losing demand.
  • Two-way trade - Markets moving up and down without a clear trend.