June retail sales commne - by W. Cunningham

Retail Sales Show Adjustment To Lower Spending Going Forward - June retail sales below expectations at -.9% total and -.4%ex-autos MOM versus expected -.1% total and +.2% ex-autos, withmoderate upward revisions in May slightly mitigating weakness; - Strong May sales due to large ticket items funded by strong$12.9 bil. consumer credit growth was mostly reversed in Juneexcept for Hlthcare, Internet, Food, Sport Goods, and Restrnts; - Furniture, autos, building materials were weak MOM and YOY; - Consumers cutting back on large items and housing spending, but steady jobs keeps confidence to spend on smaller luxuries; - Fed on hold, jobs slow with profits, but gradually, allowingequities to focus on global growth and rally somewhat further,but spreads move sideways near-term on supply, LBO fears.