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Morning Market Scoop 15 February 2019

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Barry Dumas
Moring-market-scoop

Morning Market Scoop 15 February 2019

In our morning market scoop:

  • The U.S Retail Sales Number came in much lower than most analysts expected posting its worst decline last seen nine years ago

“Where-R-The-Shoppers”

What’s the scoop? US Retail Sales

Surprize, surprize it seems that if the latest economic data for the United States is anything to go by then we (the World) might be in for a bumpy ride.

  • US Retail Sales data was released on Thursday afternoon around 15:30 SAST to a massive upset as the numbers for December came in much lower than expected.

The big picture – The U.S Retail sales number came in much lower than most analysts expected posting its worst decline last seen nine years ago. Retail Sales (MoM) for December came in at -1.2% from an expected number forecasted at 0.1%. To top it of the U.S Producer Index (PPI) which measures the change in the price of goods sold by manufacturers also disappointed coming in at -0.1% from 0.1% expected. Markets reacted to the data release and remained under pressure for most of the day.

  • “The broad weakness across most sectors adds to signs that U.S. economic growth is cooling from prior quarters -- potentially by more than projected -- as consumption makes up about 70 percent of the economy. It may reinforce investor expectations that the Federal Reserve will hold off on raising interest rates this year amid concern about trade and global growth. Excluding automobiles and gasoline, retail sales slumped 1.4 percent, the biggest drop since March 2009, after a 0.5 percent advance the previous month”. – Bloomberg

News surfaced later in the day that President Trump stated at a press conference that Trade negotiations are going well. Trump also stated that he might extend the deadline by another 60 days to get to a resolution. This seems far from the reports surfaced Thursday evening that trade reforms are far apart at the current negotiations.

Notable companies reporting earnings are:

United States: Allianz ADR (AHPL), Moodys Corporation (MCO), PepsiCo (PEP), Royal Bank Scotland PLC (RBS)

South Africa: Gold Fields (GFI), Resilient Property Income Fund (RES)

What does all this mean for me?

  • A Slowdown in Retail Sales might be a very good indicator that the United Sates economy is starting to show signs of a slowdown.
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