On Thursday at 8:30 pm, the USA will release the key September retail sales month-on-month rate, also known as the "scary data".

According to bank of america's latest real-time spending data, the retail sales data released tonight will still leave traders and strategists stunned. They thought that US consumers, with high leverage and insufficient savings, would eventually reduce spending, but the US Census Bureau did not allow the "scary data" to fall off a cliff. Instead, month after month, they managed to come up with numbers higher than expected.

According to the financial blog Zero Hedge, based on the summary data from bank of america's credit and debit cards, total bank card spending in September decreased by 0.9% year-on-year. But the only trick left for Biden's pursuers is to use bizarre seasonal adjustments to make weak data seem unexpectedly strong, and then quietly lower it over the next few months when no one is paying attention. That's exactly what will happen on Thursday.

Bank of america economist Aditya Bhave stated that the Census Bureau will use extreme seasonal adjustments to explain and offset various calendar effects.

After using the same seasonal adjustments as the Census Bureau, bank of america calculated that in September, the credit card spending per household surged by 0.6% month-on-month, but this was only based on seasonal adjustments - as mentioned above, it actually decreased by 0.9%.

Therefore, if these seasonal adjustments continue to be used for calculation, bank of america estimates that the September retail sales figures excluding autos and the core control group (retail sales excluding autos, rbob gasoline, building materials, and restaurants) will increase by 0.7% and 0.8% respectively, both higher than market expectations.

Hence, since the entire September retail sales report will be a concoction of excel spreadsheets, with the purpose of making the last month before the election appear rosy, resulting in retail sales significantly exceeding expectations, bank of america predicts that almost all categories of retail sales will experience significant growth, with department stores, general merchandise stores, and apparel stores being the biggest winners.

In summary, Bank of America warned that if its forecast is correct, the actual (inflation-adjusted) core control retail sales will increase by nearly 7% on an annual basis over three months, which means that tonight's "terrifying data" will drive up Treasury yields and the dollar, any possibility of further rate cuts will collapse!

And it's not just that: before Hurricane "Helena" arrived, food and grocery spending in affected states such as Florida, Georgia, North Carolina, and South Carolina surged, most likely due to stocking up, which will further boost retail sales. Although total card spending in these states slowed before and after the hurricane, total card spending and grocery spending in the affected states have since grown back to normal.

Bank of America realizes in its final report before the election that the game has been manipulated, so it cannot fail to appreciate the seasonally adjusted for tonight's -0.9% actual data. This is why Bavais wrote: "We believe this report will be very important, as it is released against the very encouraging GDP and GDI revisions and the intense September employment report heat. "

A month ago, the market's question was whether the USA was heading towards a recession or a soft landing. If retail sales significantly accelerate, this statement may further shift towards 'not landing,' or even accelerate again.

"Zero Hedge exclaimed: "Great, booming GDP, fantastic job reports, and now excellent retail sales. All of this means that the Fed's significant rate cuts are a terrible mistake, if so, Powell needs to raise rates, right? But obviously, they got it wrong again. If someone asks: Can retail sales data shorten the rate cut cycle? Their answer would be: Maybe not. At least not in our view. With the policy rate still close to 5%, we believe that as long as anti-inflation continues, even with strong labor and economic activity data, the Fed will comfortably cut rates again (two to four times). "

Editor/new