Dow lost 9, decliners over advancers about 2-1 & NAZ gave back 8. The MLP index gave back 1+ to the 264s & the REIT index dropped 3 to the 352s. Junk bond funds did little & Treasuries were sold. Oil dropped 2+ to the 68s & gold was about even at 1241.
AMJ (Alerian MLP Index tracking fund)
US retail sales rose solidly in Jun, boosted by increases in purchases of motor vehicles & a range of other goods, cementing expectations for robust economic growth in Q2. The Commerce Dept said retail sales increased 0.5% last month. Data for May was revised higher to show sales rising 1.3% instead of the previously reported 0.8% gain. May's rise in retail sales was the largest since last Sep. The forecast called for retail sales rising 0.5% in Jun. Retail sales in June increased 6.6% from a year ago. Excluding automobiles, gasoline, building materials & food services, retail sales were unchanged last month after an upwardly revised 0.8% increase in May. These core retail sales correspond most closely with the consumer spending component of GDP. Core retail sales were previously reported to have risen 0.5% in May. Given the upward revision to May data, the unchanged reading in core retail sales last month likely does not change views that consumer spending accelerated in Q2. Consumer spending, which accounts for more than 2/3 of US economic activity, braked sharply in Q1, growing at its slowest pace in nearly 5 years. In addition to the solid retail sales data, a sharp narrowing of the trade deficit in Apr & May has also bolstered expectations of a strong GDP reading in Q2. Consumer spending is being driven by a tightening labor market, which is steadily pushing up wages. Consumption is also being supported by tax cuts & savings. In Jun, auto sales increased 0.9% after advancing 0.8% in May. Receipts at service stations rose 1.0% on higher gasoline prices. Sales at building material stores increased 0.8% last month after surging 2.5% in May. Receipts at clothing stores fell 2.5%, the biggest drop since Feb 2017. Online & mail-order retail sales surged 1.3%, the biggest gain last Nov, after rising 0.4% in May. Receipts at furniture stores rebounded 0.6%. Sales at restaurants & bars increased 1.5% & spending at hobby, musical instrument & book stores declined further, falling 3.2% . That was the largest drop since Dec.
This is a choppy time for stocks. Trump is meeting with Putin, chances are there will be no tangible results from that meeting. Economic data continues to be good while trade wars drag on with no end in sight. The price decline for oil is becoming serious. As long as the Dow remains steady, above 25K, that's a technical sign the bulls like to see.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 69.13 | -1.88 | -2.7% |
| GC=F | Gold | 1,241.00 | -0.20 | -0.0% |
Stocks opened flat as traders digested
the latest economic data and earnings reports while watching for
developments from the summit between Pres Trump & Russian Pres Putin. The
leaders are meeting in Helsinki to discuss various issues.
Meanwhile, earnings season continues in full force. On Fri, it kicked
off in earnest with 3 banks releasing their latest quarterly
results. Today releases included a reading on the
consumer & NY manufacturing activity. The latest data
suggests that the US consumer is very healthy as Jun retail sales grew
at 0.5% while the May reading was revised to 1.3% from the previously
reported 0.8%. The Empire State manufacturing index fell after hitting
an 8-month high, declining 2.4 points to 22.6 in Jul. Asian
shares were lower after data from China showed the economy slowed slightly in Q2 & as
investors remain cautious over the impact of the heated Sino-US trade
war. China's economy grew 6.7% in Q2, in line with market expectations, & cooling a bit
from the 6.8% growth registered in each of the previous 3 qtrs. The Shanghai Composite closed down 0.6% & Hong Kong's Hang Seng finished little changed. Japan's markets were closed for a holiday. In Europe, stocks were mixed. US
stocks wrapped up a winning week on Fri with the Dow closing above the psychologically significant
25K milestone, a one-month high. The S&P 500, the broadest
measure of stocks, reached a 5-month high & the NAZ
even better, setting a record. A string of new records for some big tech
names helped drive the momentum. today, most commodities were higher but oil slid.
Stocks flat as traders digest economic data, Trump-Putin summit
US retail sales rose solidly in Jun, boosted by increases in purchases of motor vehicles & a range of other goods, cementing expectations for robust economic growth in Q2. The Commerce Dept said retail sales increased 0.5% last month. Data for May was revised higher to show sales rising 1.3% instead of the previously reported 0.8% gain. May's rise in retail sales was the largest since last Sep. The forecast called for retail sales rising 0.5% in Jun. Retail sales in June increased 6.6% from a year ago. Excluding automobiles, gasoline, building materials & food services, retail sales were unchanged last month after an upwardly revised 0.8% increase in May. These core retail sales correspond most closely with the consumer spending component of GDP. Core retail sales were previously reported to have risen 0.5% in May. Given the upward revision to May data, the unchanged reading in core retail sales last month likely does not change views that consumer spending accelerated in Q2. Consumer spending, which accounts for more than 2/3 of US economic activity, braked sharply in Q1, growing at its slowest pace in nearly 5 years. In addition to the solid retail sales data, a sharp narrowing of the trade deficit in Apr & May has also bolstered expectations of a strong GDP reading in Q2. Consumer spending is being driven by a tightening labor market, which is steadily pushing up wages. Consumption is also being supported by tax cuts & savings. In Jun, auto sales increased 0.9% after advancing 0.8% in May. Receipts at service stations rose 1.0% on higher gasoline prices. Sales at building material stores increased 0.8% last month after surging 2.5% in May. Receipts at clothing stores fell 2.5%, the biggest drop since Feb 2017. Online & mail-order retail sales surged 1.3%, the biggest gain last Nov, after rising 0.4% in May. Receipts at furniture stores rebounded 0.6%. Sales at restaurants & bars increased 1.5% & spending at hobby, musical instrument & book stores declined further, falling 3.2% . That was the largest drop since Dec.
US retail sales increase solidly in June
China announced it filed a World Trade
Organization challenge to Pres Trump's latest tariff
threat, stepping up its diplomatic efforts to counter US pressure in a
spiraling technology dispute. The Trump
administration has criticized the WTO as unable to deal with the
problems posed by China, suggesting a challenge there might have little
impact in DC. But it might help Beijing rally support from
govs that criticized Trump for going outside the WTO to impose
tariffs on Chinese & other imports. The move
is unusually swift, coming less than one week after the US Trade
Representative proposed 10% tariffs on a $200B list of
Chinese goods. Those wouldn't take effect until at least Sep.
China's
lopsided trade balance means it will run out of US imports for
penalty tariffs before the US does. Beijing is trying to recruit
support, so far in vain, from Europe, South Korea & other gov. We are unable to fight equally," said the director of the China Institute for WTO Studies at the
University of International Business & Economics in Beijing. The move "indicates that we value the role of the WTO rules," said Tu. DC
imposed 25% tariffs on $34B of Chinese goods in response
to complaints Beijing steals or pressures companies to hand over
technology. Beijing responded immediately by imposing identical
penalties on a similar amount of American imports. It has criticized the latest tariff threat but has only about $80B of annual imports left for penalties. As for why Beijing hasn't retaliated, "there might be some adjustment in China's approach to countermeasures," said Tu. Economists & business groups have suggested Beijing might try to disrupt
operations of American companies, especially service industries, in
which the US runs a surplus. But Chinese officials have tried
to appeal to American companies as allies. A Commerce Ministry spokesman said last week Beijing hoped they would lobby in DC to protect their own interests.
China files WTO challenge to US $200B tariff plan
This is a choppy time for stocks. Trump is meeting with Putin, chances are there will be no tangible results from that meeting. Economic data continues to be good while trade wars drag on with no end in sight. The price decline for oil is becoming serious. As long as the Dow remains steady, above 25K, that's a technical sign the bulls like to see.
Dow Jones Industrials
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