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U.S. retail sales fell again in December, while factory production accelerated

Retail sales dropped 0.7 percent last month, the Commerce Department said. Data for November was revised down to show sales declining 1.4 percent instead of 1.1 percent as previously reported. Sales at restaurants and bars plunged 4.5 percent. Online sales tumbled 5.8 percent. Receipts at electronics and appliance stores dropped 4.9 percent.

In another report on Friday, the Federal Reserve said manufacturing production rose 0.9 percent last month after advancing 0.8 percent in November.

Major banks express guarded optimism

Wall Street’s worst fears about the fallout from the pandemic are receding.

Three of the biggest U.S. lenders — JPMorgan Chase & Co., Citigroup and Wells Fargo & Co. — cut their combined reserves for losses on loans by more than $5 billion, helping fourth-quarter profit top estimates even as they faced head winds from low interest rates. Executives expressed guarded optimism about fiscal stimulus and rising vaccinations during a pandemic in which delinquencies have remained low. Still, the banks warned the economy isn’t out of the woods yet.

Six of the largest U.S. banks urgently set aside more than $35 billion to cover loan losses in the first half of 2020 with the message that they simply had no idea what to expect. Now, banking chiefs are pointing to prospects for a rebound this year. Unprecedented action from the Federal Reserve and lawmakers have allayed the worst-case scenarios.

“We’ve seen further improvement on both GDP and unemployment,” Citigroup Chief Financial Officer Mark Mason told reporters.

Consumer divisions at the biggest U.S. banks came under particular pressure from the coronavirus outbreak that shut businesses and put millions out of work last year. Even so, loan books have since fared surprisingly well, as a dreaded onslaught of defaults never rolled through.

JPMorgan took down reserves by $2.9 billion, helping fourth-quarter profit surge to a record $12.1 billion. Citigroup released $1.5 billion from its stockpile, resulting in a $4.63 billion profit that was down less than analysts projected. Wells Fargo released about $760 million because of lower net charge-offs. That lifted net income above estimates to $2.99 billion.

The U.S. Securities and Exchange Commission has launched an investigation into Exxon, following a whistleblower complaint that the oil major overvalued a key asset in Texas’ Permian Basin, the Wall Street Journal reported on Friday. Several people involved in valuing the asset, during an internal assessment in 2019, said employees were being forced to use unrealistic assumptions about how quickly the company could drill wells there to arrive at a higher value, the report said. Exxon denied the allegation.

Bumble, the dating app where women make the first move, has filed for a U.S. initial public offering. The Austin-based company listed in its Friday filing with the U.S. Securities and Exchange Commission an offering size of $100 million, a placeholder amount that likely will change. Bumble, started in 2014, could seek a valuation of $6 billion to $8 billion in the listing. The listing could come around Valentine’s Day.

Barneys New York is finally returning to its hometown after the pandemic delayed its post-bankruptcy revival plans. The retailer, which for decades was a mainstay of the city’s retail scene, opened Friday inside Saks Fifth Avenue’s Manhattan flagship under the name Barneys at Saks. At 54,000 square feet, the Barneys store-within-a-store is about one-fifth the size of its old location that was located several blocks to the north.

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