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S&P 500 Falls as Bulls in Hiding Despite Signs of Strong Consumer

Stock MarketsJul 16, 2021 01:50PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 fell Friday as a surprise rebound in retail sales and better-than-expected earnings weren’t enough to coax the bulls out from hiding.

The S&P 500 fell 0.20%, the Dow Jones Industrial Average slipped 0.43%, or 151 points, the Nasdaq was down 0.32%.

The Commerce Department said Friday that retail sales rose 0.6% last month. That confounded economists’ forecast for a 0.3% decline. The retail sales control group – which has a larger impact on U.S. GDP –  climbed 1.1%, well ahead of expectations for a 0.4% rise. 

The data suggest “the consumer is still alive and kicking, and while spending is certainly shifting to services, this is not inducing steep declines in goods demand,” Jefferies (NYSE:JEF) said. “As for inflation, aside from a few categories (notably autos), surging prices are not deterring consumers just yet.”

Signs that the consumer, which contributes two-thirds of economic growth, continues to spend failed to spark a bid in cyclicals.

Energy led the move lower as oil prices added to losses this week and remain on pace for their biggest weekly loss since May. Oil prices have been on the backfoot amid fears of major oil producers are set to increase output following a deal by Saudi Arabia and United Arab Emirates earlier this week.

But some suggest that the oil demand will continue to outstrip supply. “Even if one factors in the OPEC+ production hike planned in July, this leaves a substantial supply deficit that OPEC+ would need to offset by further expanding production,” Commerzbank (DE:CBKG) said in a note.

But health care stocks were in the ascendency, led by a rally in Moderna .

Moderna Inc (NASDAQ:MRNA) jumped nearly 8% on news that the stock would be included in the S&P 500 as of July 21st.

BioNTech SE (NASDAQ:BNTX), meanwhile, was up more than 3% after the U.S. Food and Drug Administration has granted priority review of the biologics license application of their mRNA Covid-19 vaccine in patients aged 16 years and older.

The bid in big tech seen earlier this week continued to fade, with the Fab 5, with exception of Microsoft (NASDAQ:MSFT, mostly lower.

Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Amazon.com (NASDAQ:AMZN) were lower.

Sentiment on stocks have also been soured this week following a resurgence in Covid-19 infections, brought on by the Delta variant. Covid deaths are on the rise again following weeks of decline.

“After weeks of declines, seven day average daily deaths have increased by 26% to 211 per day,” said Dr. Rochelle Walensky, the director of the Centers for Disease Control and Prevention during a press briefing Friday.

 

S&P 500 Falls as Bulls in Hiding Despite Signs of Strong Consumer
 

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Comments (10)
sally cornish
sally cornish Jul 16, 2021 4:53PM ET
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Hmmm, despite 24/7 North Korea-style propaganda, why would people not believe the Marxists trying to promote the notion that higher revenue means the economy is doing well? Could it be the hyper-inflation is not "transitory" as they were trying to gaslight, rising home prices with declining home sales, cost of living increases in blue states that are upwards of 85% in some areas of California above the national average, personal/corporate/government debt at all time highs, market tanks any time they hint they might raise interest rates even 0.001%, and a tyrannical administration that is even trying to eliminate checks and balances such as the filibuster to push through trillions of dollars of partisan spending...what could it be...
sally cornish
sally cornish Jul 16, 2021 4:53PM ET
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Let's also not forget that the housing crisis is compounded by the fact that landlords are going bankrupt because they cannot evict non-paying tenants...who cannot afford alternate housing dur to hyper-inflation...
Michael Angelo
Michael Angelo Jul 16, 2021 4:38PM ET
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Ok. I can agree that the article is just "filling the dots" trying to say something(not a clue) . BUT, my friends your opinions are really from another world. PAT*H*TIC.
Lorence Issa
Lorence Issa Jul 16, 2021 4:22PM ET
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Fake News drumming Covid/Delta again, LA in August going into full Mask for vaccinated or not, same with NY. If they keep it up, we are going to see Market Crash similar to Jan/Feb 2020 in my opinion. If Government and Fake News dose not stop.
Faisal Komba
Faisal Komba Jul 16, 2021 4:16PM ET
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Forex
Jon Bal
Jon Bal Jul 16, 2021 3:57PM ET
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consumers are so absolutely prosperous now. is the only logical reason for retail to be up
Lindokuhle Masina
Lindokuhle Masina Jul 16, 2021 3:49PM ET
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U.S Markets Dropped Hard, Bulls will gain power the following week but we should keep in mind the High inflation rates which causing such uncertainties in the markets
Mitchel Pioneer
Mitchel Pioneer Jul 16, 2021 3:32PM ET
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Mark your calendars, the laughingstock of the financial world is about to post a loss on a Friday.  Or, will savvy "investors" begin "snapping up beaten down shares" in "late trade"?
Stan Smith
Stan Smith Jul 16, 2021 2:35PM ET
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Is smart money leaving the Theater despite stock pumping headlines? Can you tell us whats really going on?
Kelly Mayer
Kelly Mayer Jul 16, 2021 2:19PM ET
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Bulls were slaughtered. We are innrec3ssion territory. Lockdowns incoming. Double dip recession. Retest of march 2020 lows
Meru Pet
Meru Pet Jul 16, 2021 2:19PM ET
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it is summer, check also the volumes
Lawrenti Berija
Lawrenti Berija Jul 16, 2021 2:14PM ET
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strong consumer my ..as, indebted consumer consuming stuff they don't need and money printed by the almighty Fed.
 
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