US Business Inventories and Retail sales rise: Is it growth, inflation or the 15% oil price hike at work

Interesting questions being posed on the 1+% growth in US business inventories and the 2+% increase in US retail sales. Is it really growth or the impact of QE2 plus the rise of 15% in oil prices in the month of April 2011. Given everything else that has been happening in the last two weeks, the slowing growth in China, the crisis in Greece and Europe and the traumatic reduction in industrial, production and retail numbers in Japan, a dramatic turnaround in the US economy doesn’t make sense if the rest of the world is falling apart or slowing down.

Oil obviously slid to 95 this morning in Europe but recovered sharply before noon in US trading however there is good chance that prices will slide again later today and tomorrow before the weekend hits.

Happy trading. Remember volatility is a friend; it’s those damn correlations you have to watch out for.