US retail sales in focus amid poor retailer results
World stock markets have spent overnight and this morning in the red with overseas markets catching follow through from yesterday’s US selloff. Soft industrial production in India didn't help confidence in Asia Pacific markets. European GDP figures for the most part have been in line or slightly better than expected but markets there continue to struggle as well with the question of what the ECB may do in terms of stimulus still overhanging EUR trading.
Crude oil is on the rebound today, clawing back some of yesterday’s losses, in what looks like a trading bounce after WTI got a bit oversold in its recent nosedive. The rebound has helped CAD and NOK to bounce back a bit.
US indices are trading down slightly with traders awaiting today’s retail sales report before committing to a direction. The Fed has been leaning toward raising interest rates in December if the economy continues to improve. Job growth turned around in October and the street may now look to the retail sales figure for a sign of whether consumer spending is coming around as well. The only problem, however, is that earnings and guidance from major retailers lately like Wal-Mart, Macy’s and Nordstrom have been dismal, raising the potential for a big miss.
Should sales come in low, FOMC liftoff speculation could ease a bit in the short term and we would then watch Fed speakers to see if they panic or if they try to talk down the importance of a miss as they have done previously. A positive result, which would be more of a surprise to me at this point, would enhance the case for liftoff and keep support under USD strong.
Cisco Systems $0.59 vs street $0.56, guides next Q $0.53-$0.55 below street $0.56
Nordstrom $0.57 vs street $0.72, cuts full year same store sales growth to 2.5-3.0% from 3.5-4.5%, cuts EPS guidance to $3.40-$3.50 from $3.70-$3.80
Fossil $1.19 vs street $1.14, sales $771m below street $795M guides next Q to $1.40 to $2.00 below street $2.15, cuts full year EPS guidance to $5.60-$6.20 from $6.20-$7.00.
Significant announcements released overnight include:
Germany GDP 1.8% as expected
Italy GDP 1.0% vs street 0.9%
France GDP 1.6% vs street 1.7%
Poland GDP 3.4% vs street 3.3%
Greece GDP (0.4%) vs street (1.9%)
Eurozone GDP 1.7% vs street 1.6%
Eurozone trade balance €20.5B vs street €18.2B
Spain consumer prices (0.7%) as expected
India industrial production 3.6% vs street 4.7%
India consumer prices 5.0% vs street 4.8% and previous 4.4%
Upcoming significant announcements include:
1:00 pm GMT Poland consumer prices previous (0.8%)
8:30 am EST US retail sales street 0.3%
8:30 am EST US retail ex auto street 0.4%
8:30 am EST US producer prices street (1.2%)
8:30 am EST US core PPI street 0.5%
10:00 am EST US Michigan consumer sentmnt street 91.5
10:30 am EST US natural gas street 49 BCF
12:30 pm EST FOMC Mester speaking
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