Morning Minutes

Positive Retail Sales and Retail Earnings Reports Boost Equity Markets




A series of positive inflation and retail sales reports from around the world overnight and into this morning has ignited another rally for world equity markets. Building on gains of 1.4%-2.3% for major US indices, US index futures are up 0.2%-0.4% so far today. Over in Europe, the FTSE is up 1.2% and the Dax is up 0.8%. Treasury yields appear to be stabilizing with the US 10-year Treasury Note yield hovering near 4.50%.

It’s a big day for economic news, headlined by several better than expected reports out of the US. US Retail Sales (-0.1% vs street -0.3%, previous revised up to 0.9% from 0.7%). US Producer Prices (1.3% vs street 1.9% and previous 2.2%). The Empire State Manufacturing Index (9.1 vs street -2.8 and previous -4.6).

Earlier today, the UK reported a big improvement in its Consumer Price Index (4.6% vs street 4.8% and previous 6.7%), confirming a global trend in easing inflation pressures, although UK Core CPI didn’t improve as much (5.7% vs previous 6.1%). Chinese Retail Sales (7.6% vs street 7.0% and previous 5.5%) and Industrial Production (4.6% vs street 4.5%) also came in better than expected.  

Target (TGT) is soaring this morning, up 13.3% in premarket action after the US retailer posted much stronger than expected earnings ($2.10 vs street $1.47). Results from Canadian grocers were mixed with Loblaws beating expectations ($2.26 vs street $2.24), while Metro ($0.99 vs street $1.07), fell short of analyst estimates. Walmart reports tomorrow morning. After the close today, results are due from communications equipment giant Cisco Systems.

While the major paper currencies are flat today, alternative currencies are rallying with Bitcoin up 2.1% and Gold up 0.6%. Commodity trading is mixed with Copper up 0.6%, Natural Gas up 2.6%, but US Crude Oil down 0.5% ahead of US weekly inventory data due at 10:30 am EST.  

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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