Stocks Retreat From Record Highs After Retail Sales Data
4:20 pm Tuesday, June 15th, 2021
U.S. stocks fell on Tuesday after fresh data showed Americans slowed their spending last month. Apart from the opening tick, which was a record-setting one for the S&P 500, the market had spent the entirety of today’s session in negative territory.
The S&P 500 real estate (-0.9%), materials (-0.8%), and consumer discretionary (-0.7%) sectors are leading the sectors in losses but are down less than 1.0%. On the upside, the energy sector (+1.5%) is outclassing everything else as oil prices ( +1.4%) continue to rise.
There’s been a muted reaction to today’s large batch of economic data, which featured a 1.3% m/m decline in retail sales for May (consensus), a 0.8% m/m increase in the Producer Price Index for May (consensus 0.5%), and a 0.8% m/m increase in industrial production for May (consensus 0.7%).
It could be argued that the weaker-than-expected retail sales data and hotter-than-expected inflation data have had an offsetting impact on the Treasury market, where the 10-yr yield is up just one basis point to 1.51%. Interestingly, total PPI was up 6.6% year-over-year.
It seems more likely, though, that the market already expected producer prices to run a little hot given the hot CPI report last week and the oft-repeated expectations for rising inflation pressures. Thus, the real interest lies in what the Fed has to say about monetary policy with respect to the recent inflation data tomorrow afternoon.
In other developments, the U.S. and EU suspended their tariff dispute surrounding Boeing (BA) and Airbus, Cleveland-Cliffs (CLF) and Spirit Airlines (SAVE) raised guidance, and Hindenburg Research accused DraftKings (DKNG) of obfuscating black market operations.
Total retail sales fell 1.3% in May (consensus -0.6%) after an upwardly revised 0.9% increase in April (from 0.0%). Excluding autos, retail sales fell 0.7% (consensus 0.5%) after an upwardly revised flat reading for April (from -0.8%).
