US Stocks Close Lower After Weak Retail Sales
US markets closed the trading session lower on Friday after Retail Sales data came out well south of expectation. The Dow lost 0.41%, the S&P 0.21% and the Nasdaq fell 0.35% on the day, however, the data was not weak enough to convince the market that the Fed won’t still raise rates at the next meeting. The dollar once again bounced back, up over 0.5% on the day as the Euro and other majors dropped hard. Gold also took a hit on the back of dollar buying losing just shy of 2% on the day, although it is still hanging in just above the $2,000/oz level.
Mixed Data Keeps 25bps on the Table for the FOMC
Last week was data-heavy for US markets and there are clear signs that there is a slowing in the US economy with Retail Sales, PPI and CPI numbers all coming out lower than expected. However, with the job market remaining tight and Industrial production and sentiment also showing resilience the Fed still feels that it has some work to do to bring inflation under control. Currently, the market is pricing in an 80% chance of another 25bps being added at the May meeting but watch this space closely as we hit earnings season in earnest this week and we have still got a long stretch ahead of us before the May 3rd announcement.
Subdued Open for Markets Ahead of Another Big Week
Asian markets have had a quiet start to the day today but investors do not expect that state of affairs to last long. It is a thin day in terms of macroeconomic data releases with just the Empire State Manufacturing Index due out in terms of tier 1 releases. However, earnings season kicked off on Friday in the US with some of the big banks beating expectations and we have more due this week. Today we hear from State Street and Charles Schwab but the names get bigger and more influential as the week progresses.
