Consumer spending, retail sales, and consumer price index pressures Wall Street
Consumer index reports and retail sales reports are the headlines for this week. Unexpectedly, both reporters were negative about rising concerns over the Fed’s monetary policy, and the recession scenario is on the table once again. Starting with the 14th of this month’s report, the U.S. core inflation data showed that, as expected, the inflation rate had hit zero. This month, there are rising risks of inflationary pressure and worries about the chances of rising key interest rates in future meetings.
On a year-to-year basis, the core CPI jumped by 3.2%, down by 0.1% from the previous one and 0.5% from the prior one. Yet the number is highly excited to climb this month due to poor retail sales and some macroeconomic challenges, including the two ongoing wars now.’ SA Investing Group Leader Mott Capital Management’s Michael Kramer shared his thoughts on the data and said:
“CPI came in below expectations across the board as the increase in health insurance was offset by a sharp decline in used auto prices, gasoline, and shelter.”
As for yesterday’s retail sales report, October retail sales decreased by 0.1% month-over-month (M/M) to $705.0B. Broadly speaking, this decrease was less than expected, and in some sense, it marked a slowdown in the market. Furthermore, ore retail sales increased by 0.1%, surpassing the -0.2% consensus but decelerating from the +0.8% in the previous month (revised from +0.6%).
As for gas and auto sales, the report shows a 0.1% increase, which is way better than the previous flat 0.0% gain. Health and personal care stores saw the largest monthly increase at 1.1%, followed by grocery stores at 0.7%, and furniture stores experienced the biggest decline at 2%.
On paper, the U.S. economy remains healthy, yet based on this data and the market uncertainty, it’s more likely that the Fed will take these two reports as a reference for their next meeting policy decisions. Inventors see that Fed officials will keep raising interest rates steadily at the same rate.
As for today, Thursday, the 16th Wall Street, scored its third down day since the 14th due to troubling news. Today’s fall was due to a confounding note that Walmart officials shared. Walmart wanted to say that consumer spending pressure is increasing steadily and that soon it will reach critical levels.
In Q3, Walmart (NYSE: WMT) reported a significant improvement in net income, reaching $453 million (17 cents per share) compared to a year-ago loss. Despite this positive development, Walmart expressed caution about consumer spending during the crucial holiday season, citing inflationary pressures. As a result of the report, its shares fell by 2.7%; in turn, the market turmoil extended to Wall Street’s performance.
Meanwhile, in the stock market, as of 11:42 a.m. ET, the S&P 500 benchmark fell by 0.03% to 4.502 bps. The tech-heavy Nasdaq was slightly higher by 0.06% to 14.113 bps, and the Dow Jones future declined by 0.29% to 34.388 bps.