This Data Foreshadows A Robust Holiday Shopping Season

During a week that's already seen a lot of decent earnings reports from retailers, it's not surprising that we would get additional positive reads on the consumer with today's retail sales and consumer sentiment reports. US Retail Sales both including and excluding automobiles came in at 0.3% in October, in-line with the Estimize consensus. This is a welcomed improvement over last month which saw a decline of 0.3%; excluding autos the loss was slightly better at -0.2%. The ex-auto & gas figure from September, originally -0.1%, was revised higher to 0.1% today. October's reading reflected an auto sales rebound of 0.5%, but even more telling was the ex-auto & gas number that came in much higher at 0.6%, reflecting the impact a decrease in gasoline station sales is having on the overall figure. Strength in nonstore (internet) retailers, sporting goods and food services drove October's numbers.

Also out this morning, the Reuter's/University of Michigan's consumer sentiment index hit 89.4 for it's mid-November reading, above expectations and last month's 86.9. This is the highest level for the index since July 2007. Last month's positive reading was seen as leading indicator for today's retail sales report. The robust mid-November number offers new evidence of future strength, and certainly bodes well for the health of the U.S. consumer as we head into the holiday shopping season, which in some cases can make up 50% of a retailer's yearly sales.  Markets initially moved higher on the data, but have since flattened.

How Are We Doing?

Expectations for S&P 500 earnings growth for the third quarter stand at 11.6%. Revenues are anticipated to come in with 5.0% growth. All 10 sectors are anticipated to post positive YoY growth on both the earnings and revenue front.

Leaders

Earnings:

Consumer Discretionary (14.4%). Notable industry: Internet Retailers (25.3%)

Energy (14.2%). Notable industry: Oil, Gas and Consumable Fuels (14.6%)

Health Care (13.9%). Notable industry: Biotechnology (45.1%)

Revenues:

Health Care (12.1%). Notable industry: Biotech (39.0%).

Information Technology (7.1%). Notable industry: Software (15.7%)

 Laggards

Earnings:

Utilities (2.8%). Notable industry: Gas Utilities (-8.3%).

Telecommunication Services (1.4%): All five companies are within Diversified Telecom Services. Only Verizon posted YoY growth.

Revenues:

Energy (1.2%). Notable industry: Oil, Gas and Consumable Fuels (­0.5%).

Materials (2.4%). Notable industry: Paper & Forest Products (­-18.3%).

Beat/Miss/Match

Earnings: With over 90% of the S&P 500 reporting thus far, 55% have beaten the Estimize consensus, 34% have missed and 11% have met. This is compared to Wall Street estimates, of which 71% of companies have beat on the bottom­-line, 22% have missed and 7% have met.

Revenue: 51% have beaten the Estimize consensus, 49% have missed, and 0% have met. For revenues, 58% of companies have beat the Wall Street estimate, while 42% have missed.