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Will U.S. Retail Sales Help The Equity Market?

By Boris SchlossbergMarket OverviewNov 17, 2020 04:48AM ET
www.investing.com/analysis/will-us-retail-sales-help-the-equity-market-200544859
Will U.S. Retail Sales Help The Equity Market?
By Boris Schlossberg   |  Nov 17, 2020 04:48AM ET
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Market Drivers Nov. 17, 2020

  • Nasdaq leads equities slightly higher
  • Dollar weaker across the board
  • Nikkei 0.42% Dax -0.16%
  • UST 10Y 0.89
  • Oil $41.22
  • Gold $1889/oz.
  • BTC/USD $16714/oz.
  • USD US Retail Sales 8:30

Equity markets were mixed while the dollar was lower across the board as a mild risk-off tone dominated markets in a generally quiet Asian and early European session.

There was little fresh news in overnight trade so Asian markets followed through on positive sentiment from the Moderna (NASDAQ:MRNA) vaccine but the move was very modest as investors have clearly tempered their expectations regarding the rollout and broad acceptance of the product.

In the meantime, much of the OECD world is operating at limited capacity as many regions remain ravaged by the coronavirus and are in some forms of limited lockdowns. The Nasdaq which at this point has become a shorthand for the work-from-home lifestyle has resumed its leadership role and was up by 40 basis points.

Given the severe spread of COVID, it will be interesting to see how the US consumer responds to constrained mobility. Today’s US Retail Sales data is expected to print at 0.5% vs. 1.9% – a significant slowdown from the month prior. However, the consumer has been surprisingly resilient and if the data proves better than forecast it would add to the bullish thesis that the US economy remains organically stronger than the consensus view.

If the consumer can prop up the US economy while the vaccine comes online and a new fiscal package is passed early next year, the market would have all the ingredients for a strong rally despite the challenges posed by the pandemic.

If however, the second wave shows that it is clearly taking its toll on mobility and consumer spending the markets could begin to correct sharply given little evidence of any immediate relief.

Will U.S. Retail Sales Help The Equity Market?
 

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Will U.S. Retail Sales Help The Equity Market?

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Comments (2)
King Erigga
King Erigga Nov 17, 2020 3:42PM ET
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hello
Glenn Ebersole
Glenn Ebersole Nov 17, 2020 7:06AM ET
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Where does the pick up the 25% overload from the hops from the China trade deal that left us sitting on the sideline. Markets now ride up another 25% based on a recovery.When is the market value to replace the trade loss and recovery except for inflation and high interest rates high unemployment and slow recovery?
 
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