Sale, Sale, Sell?…Revisited

In late May of this year we looked at UK retail sales, as the state’s “Office for National Statistics,” were quick to point out that the 7.7% annualised rate for April was the largest rise since April 2011, which chimed with policy-makers boasting at the time that UK economic growth was the fastest within the G7.

However, we re-stated a preference to study charts, as price doesn’t lie or try to guestimate, going on to observe a close correlation between retail sales and the UK’s FTA All Share Stock Index, reminding that the latter is perhaps the best barometer of whether there is growing optimism within the UK, confirmed by a rising index, a sideways move perhaps indicating a subtle change, or a negative social mood as evidenced by a falling stock-index.

5 Nov 14 Blog 1.

A closer look showed that the index peaked in late February 2014, since when both momentum and volume have trended lower, never a healthy sign, with a suggestion that the temporary rise in “Sales,” could be interpreted as a “Sell” signal for stocks, followed by a slowing UK economy, being as the stock-index is a lead indicator in respect of economic growth.

Fast forward to now and we can see the following:-

5 Nov 14 Blog 2.

Well, retail sales have fallen off the proverbial cliff in the five months since that April figure, whist the All-Share has fallen by a further 4% and the Q314 advance GDP reading for the UK, announced last week, came in at 0.7% versus the 0.9% seen in Q214, a 23% slow-down.

So, is the message, Sale, Sale, Sell, set to continue?

Again, let the charts do the talking, so here is the FTA All-Share, which includes one of our preferred indicators, Buy, Sell or Neutral.

5 Nov 14 Blog 3.

They say a picture tells a thousand stories, so perhaps it’s time to look at ours.

 

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One response to this post.

  1. […] “Sale, Sale, Sell?” in May, subsequently revisited in November, commented on UK retail sales against the Nation’s main […]

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