Live Markets: Fill 'er up: Retail sales, jobless claims, UMich, et al
14/04/2022 16:22
* S&P, Nasdaq in the red; Dow in positive territory
* Cons staples up most among S&P sectors; tech biggest loser
* STOXX 600 up 0.7%
* Dollar up; gold, crude, bitcoin slide
* U.S. 10-year Treasury yield at 2.78%
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FILL 'ER UP: RETAIL SALES, JOBLESS CLAIMS, UMICH, ET AL
(11:21 EDT/1521 GMT)
A beggar's feast of data provided sensory overload on
Thursday, ending the holiday-shortened weak with familiar common
themes: the gas pump is king and main street is hiring.
Receipts at U.S. retailers USRSL=ECI increased by 0.5% in
March, according to the Commerce Department. urn:newsml:reuters.com:*:nL2N2WB24I
While the number missed consensus by a hair, it stands on
the shoulders of February's upwardly revised 0.8% growth.
The increase was almost entirely attributable to rising
prices at the gasoline pump. Stripping away the 8.9% increase in
the rate of wallets being emptied at filling stations, retail
sales actually fell 0.3%. urn:newsml:reuters.com:*:nW1N2WC000
Sticker shock at the Chevron station appears to be
convincing consumers to pull back on spending in other areas.
Non-store retail sales, which include internet shopping, plunged
by 6.4%.
With year-on-year headline CPI reaching a blistering 8.6% -
the highest it has been since 'Raiders of the Lost Ark' was
selling tickets and popcorn - Americans are spending a lot more
for less.
But Ted Rossman, senior industry analyst at Bankrate, helps
us see the report through rose-ish tinted glasses:
"We continue to see evidence of a resilient consumer,"
Rossman writes, in convenient foreshadowing of the UMich data to
follow.
"It’s frustrating to be paying so much more for gas,
groceries and housing," he adds. "But most Americans are
actually doing pretty well financially."
Core retail sales, which excludes building materials,
autos/parts, gasoline, and food services - and corresponds most
closely to the personal expenditures component of GDP -
unexpectedly inched 0.1% lower, defying the 0.2% gain analysts
expected.
The number of U.S. workers filing first time applications
for unemployment insurance USJOB=ECI rose by 18,000 last week
to 185,000, a number which remains below the level economists
associate with healthy labor market churn and speaks to the
ongoing worker drought.
That drought is evident in job openings hovering near record
high despite a 3.6% unemployment rate. Employers are hiking
wages and avoiding handing out pink slips.
"The uptick in jobless claims is a seasonal adjustment
issue; the trend continues to fall, slowly," says Ian
Shepherson, chief economist at Pantheon Macroeconomics. "Claims
are now so low that a further big decline is unlikely."
Ongoing claims USJOBN=ECI , reported on a one-week lag,
declined to 1.475 million, edging further below the pre-pandemic
level of 1.7 million.
The cost of goods imported from U.S. trading partners
USIMP=ECI jumped by a hotter than expected 2.6% on a monthly
basis and a scorching 12.5% year-on-year. urn:newsml:reuters.com:*:nL2N2WB260
It was the largest monthly increase since April 2011, and
was largely driven by spiking gasoline prices in the face of
Russia's war on Ukraine.
Import prices remain, along with recently released CPI, PPI
and other indicators, cruising at an altitude far above the
Fed's average annual 2% inflation target.
See the graphic of assorted inflation indicators below (and
grab your surfboard - the wave is rad:
The mood of the U.S. consumer has surprised analysts by
brightening considerably this month, according to the University
of Michigan's preliminary April reading.
UMich's Consumer Sentiment index USUMSP=ECI jumped 6.3
points to 65.7, a move mostly attributable to the 9.8 point
surge in the near-term expectations component.
The current conditions segment rose a more modest 0.9 points
and near- and long-term inflation expectations held firm at 5.4%
and 3.0%, respectively.
The unexpected veer toward optimism could likewise be traced
to the petrol pump.
"Retail gas prices have fallen since the March peak, and
that fact was immediately recognized by consumers," Richard
Curtin, chief economist at UMich's Surveys of Consumers. "There
are still significant sources of economic uncertainty that could
easily reverse the April gains, including the impact on the
domestic economy from Putin's war, and the potential impact of
new covid variants."
In more ancient news, the value of goods piled up in the
store room of U.S. businesses USBINV=ECI increased by 1.5% in
February, a stronger reading than the 1.3% forecast and a modest
acceleration over January.
This is a positive sign that the supply chain is slowly
becoming untangled, allowing U.S. firms to replenish their
stocks.
It also bodes well for first quarter GDP, at which the
Commerce Department is expected to take its first stab on April
28.
Wall Street was mixed in late morning trading, as benchmark
U.S. Treasury yields resumed their uphill climb, once again
pressuring market-leading growth stocks.
(Stephen Culp)
*****
WILL BACK-TO-BACK RALLIES SNAP WALL STREET'S DOWNWARD TREND?
(0900 EDT/1300 GMT)
Pre-market trade in futures on Thursday indicate a weak
market and may cast in doubt a halt in the downward trend on
Wall Street despite the strong rally the day before.
Nasdaq futures NQcv1 were down 0.24%, while S&P 500
futures EScv1 fell 0.25%.
Advancing stocks made up more than 80% of volume on the New
York Stock Exchange .AD.N on Wednesday for the first time
since March 16th, says BTIG research.
But typically strong upside volume needs to be seen
back-to-back to suggest a durable low is in place, says Jonathan
Krinsky, chief market technician at BTIG.
"Ideally we would like to see a follow-through day with
another 80% upside day, something we haven't seen since July
'21," Krinsky said.
"Of course the March 16th event didn't get that and still
led to a strong rally, but that rally eventually ran out of
steam," he said.
S&P e-mini futures remain within a downtrend channel and
need to clear the 4,450-4,460 range to break out of that, he
said.
While a breakout wouldn't necessarily change a cautious
medium-term outlook, in the short-term it would be respected, he
said.
(Herbert Lash)
*****
For Thursday's posts prior to 0900EDT/1300 GMT click here:
urn:newsml:reuters.com:*:nL5N2WC2WB
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Money markets bet ECB will raise rates fast https://tmsnrt.rs/3HJBEDn
SNapshot 140422 https://tmsnrt.rs/3LV9Bnc
USjobmarket https://tmsnrt.rs/3KIQ4Gm
USrateswap https://tmsnrt.rs/38Shk7h
Retail sales https://tmsnrt.rs/37e3I5Z
Jobless claims https://tmsnrt.rs/3xt4fLV
Inflation https://tmsnrt.rs/3M5UxTL
UMich https://tmsnrt.rs/3M2CxJZ
Business inventories https://tmsnrt.rs/3ObYVCv
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