Thanksgiving and Black Friday sales disappointed, on the whole, as they were down 6.4 percent from a year earlier. We hope Cyber Monday will make up for the retail short fall over the weekend. Retail sales are important because they make up 2/3 of US GDP. Additionally, oil has dropped to the mid 60’s from June, when oil was over a 100 dollars a barrel. This should add to a family’s disposable income over time and help with retail sales, vacations, etc., but clearly this was not apparent last weekend.
In the short term, we believe the S&P is slightly overvalued trading at 17.6x 2014 and 16.3 times 2015 earnings. Longer term we are constructive, but we do not expect a duplication of the huge S&P returns over the past few years.