Las acciones cotizan ligeramente a la baja después de un aumento de las ventas minoristas más débil de lo esperado – MarketWatch


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Market Snapshot

U.S. and Chinese officials this weekend are meant to review China’s compliance with the phase one trade deal

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Stocks traded near unchanged Friday, after initially edging lower following a weaker-than-expected rise in July retail sales raised questions about the durability of the economy’s snapback from its pandemic-induced collapse in the spring.

Market participants were also bracing for a round of virtual trade talks between the U.S. and China this weekend against a backdrop of rising tensions between the two countries.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, +0.25% was up 14 points, a move of less than 0.1%, at about 27,910, while the S&P 500 SPX, +0.06% was 2 points, or less than 0.1%, higher at 3,376. The Nasdaq Composite COMP, -0.25% shed 31 points, or 0.3%, to trade near 11,012.

The Dow on Thursday fell 80.12 points, or 0.3%, to end at 27,896.72, while the S&P 500 SPX, +0.06% lost 6.92 points, or 0.2%, to close at 3,373.43, after hitting an intraday peak at 3,387.24, temporarily trading above its Feb. 19 closing record of 3,386.15. The Nasdaq Composite rose 30.27 points, or 0.3%, higher to close at 11,042.50. The major indexes remain on track for weekly gains.

What’s driving the market?

Retail sales rose 1.2% in July, the third straight monthly increase but weaker than the 2% rise forecast by economists surveyed by MarketWatch. Excluding autos and gasoline, sales rose 1.5%, beating expectations for a 1.1% increase. June sales were revised higher.

Meanwhile, analysts said the continued deadlock between congressional Democrats and the White House over a coronavirus aid package could be limiting upside for the market. Negotiations to extend measures, including $600 a week in additional unemployment benefits, that expired at the end of July have remained stalled since the end of last week. President Donald Trump last weekend signed executive orders that would partially extend some measures but those face questions about their legality and logistics.

“We have had recent good news on the jobs front and retail sales in July are up from a year ago. But in the risk category is consumer confidence which has been deteriorating in recent weeks with fear that a much needed fiscal support package may not happen,” said David Donabedian, chief investment officer of CIBC Private Wealth Management.

“Income support from the government has been critical and there is a big risk to the economy and the stock market if it does not continue,” he said.

Economists warned that the retail data indicated consumer spending had lost some steam, underlining fears of a further slowdown.

The data “underscores that wary consumers have turned more cautious amid a virus resurgence and fading stimulus support,” said Lydia Boussour, senior economist at Oxford Economics. She said the data also matches up with a stall in the firm’s own recovery tracker, confirming that “consumers are likely to keep a tight rein on their spending until a medical solution to the pandemic is found.”

Meanwhile, virtual talks between U.S. and Chinese officials this weekend are meant to review China’s compliance with the phase one trade deal agreed last year. Unease surrounds the talks given growing tensions over China’s actions in Hong Kong and other issues.

The tone for global equities wasn’t helped by a 1.1% decline in Chinese retail sales in July, versus expectations for a flat reading.

In other data, second-quarter productivity rose by 7.3%, while unit labor costs jumped 12.2%. Economists were looking for a 1.4% productivity rise and an 8.7% rise in costs.

July industrial production saw a 3% rise, topping forecasts for an increase of 2.7%, though the index remains far below pre-pandemic levels. Capacity utilization last month rose to 70.6% from 68.5% in June, versus expectations for a reading of 70.5%.

An initial reading on the University of Michigan’s August consumer sentiment index came in at 72.8 compared with expectations for 72.

Which companies are in focus?
How are other markets trading?

In Asia overnight Friday, China’s CSI 300 index 000300, +1.48% closed 1.5% higher, while Hong Kong’s Hang Seng Index HSI, -0.18% slipped 0.2% and Japan’s Nikkei 225 NIK, +0.17% gained 0.2%.

In Europe, the Stoxx 600 Europe Index SXXP, -1.19% traded 1.2% lower and the FTSE 100 UKX, -1.54% slumped 1.6%, after a similar tumble in the previous session.

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.691% was off 1 basis point at 0.704%. Bond prices move inversely to yields.

Gold prices GC00, -0.94% were under pressure, off 0.7% at $1,955.30 an ounce, following a 1.1% gain on Thursday. Crude-oil prices CLU20, -0.45% edged lower in quiet trade, pressured by concerns over the outlook for demand.

The greenback continued its slide, with the ICE U.S. Dollar Index, DXY, -0.25% a gauge of the buck against a half-dozen major rivals, down 0.2% to 93.11.

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