Stocks Seeing Pressure Despite Relatively Upbeat Data…..
U.S. stocks are lower in early action, with the spiking new COVID-19 cases appearing to continue to foster some uneasiness, along with escalating U.S. and China tensions. The markets are falling despite some upbeat domestic economic data, headlined by a stronger-than-expected rise in June retail sales. Earnings results from Bank of America, Morgan Stanley and Dow component Johnson & Johnson are being heavily scrutinized, while Twitter is seeing pressure after a cybersecurity attack on the social media platform. Treasury yields are lower as bond prices rise and the U.S. dollar is little changed. Crude oil prices are lower, along with gold. Asia finished mostly lower as mixed Chinese economic data poured in, while Europe is declining as the markets digest the aforementioned data and the unchanged monetary policy decision from the European Central Bank.
As of 9:00 a.m. ET, the September S&P 500 Index future is 23 points below fair value, the DJIA future is 195 points below fair value, and the Nasdaq 100 Index future is 135 points south of fair value. WTI crude oil is moving $0.46 lower to $40.74 per barrel and Brent crude oil is decreasing $0.33 to $43.46 per barrel. The Bloomberg gold spot price is down $6.02 to $1,804.27 per ounce. Elsewhere, the Dollar Index—a comparison of the U.S. dollar to six major world currencies—is little changed at 96.11.
Retail sales top forecasts, jobless claims continue moderation but remain elevated…..
Advance retail sales for June rose 7.5% month-over-month (m/m), versus the Bloomberg forecast of a 5.0% increase after May’s upwardly-revised record 18.2% jump. Last month’s sales ex-autos grew 7.3% m/m, compared to expectations of a 5.0% rise and May’s downwardly-revised 12.1% gain. Sales ex-autos and gas increased 6.7% m/m, compared to estimates of a 5.0% increase, and May’s reading was adjusted down to a 12.1% rise. The control group, a figure used to calculate GDP, was up 5.6% m/m, compared to projections of a 4.0% increase and versus May’s negatively-adjusted 10.1% advance.
Weekly initial jobless claims came in at a level of 1,300,000 for the week ended July 11th, north of estimates of 1,250,000, and compared to the prior week’s downwardly-revised 1,310,000 level. The four-week moving average declined by 60,000 to 1,375,000, while continuing claims for the week ended July 4th fell by 422,000 to 17,338,000, south of estimates of 17,500,000. The four-week moving average of continuing claims decreased by 737,750 to 18,272,250.
The Philly Fed Manufacturing Index in July slowed but remained solidly in expansion territory (a reading above zero), declining to 24.1 from the 27.5 posted the month prior, and versus expectations of a decrease to 20.0.
Treasuries are rising following the data and as the stock markets come off a couple sessions of solid gains that have been bolstered by the latest dose of positive trial data of a potential COVID-19 vaccine. The yield on the 2-year note is dipping 1 basis point (bp) to 0.15%, while the yields on the 10-year note and the 30-year bond are declining 2 bps to 0.61% and 1.31%, respectively.
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