Friday, May 11, 2007
Retail Woes
Stocks suffered yesterday following signs of economic slowing in the retail sector. The Dow closed the session with a loss of 147.74 points to 13,215.13. The SPX declined 21.11 points to 1,491.47.
The SPX opened down 6 points so our play was alas not filled.
Economic data made the Bears growl yesterday led by disappointing same-store retail sales data. On top of this, the trade deficit widened, which is likely to drop first quarter GDP below 1.0 percent.
The trade deficit widened to $-63.9 billion from $-57.9 billion in February. This was much worse than estimates for a figure of $-60.1 billion. Of course, oil import prices were the culprit and this isn’t likely to change for April either. Some economists feel GDP growth will come in between 0.5 percent and 0.8 percent when revisions are released from 1.3 percent initially.
A day ahead of the retail sales data for April, same-store sales results seriously disappointed. Though an early Easter is partly to blame, high fuel prices, a weak housing market and weather issues all combined to create the weakness.
And if that wasn't enough crude prices rose slightly Thursday, up 26-cents to $61.81. On Wednesday, prices fell following a strong gain in weekly inventory data for crude and gasoline. Gasoline prices saw a stronger gain today, up more than four percent. Though inventories did pick up last week, there are concerns in the market that supply will not be able to keep up with demand during the summer and that this could push prices even higher.
The PPI and retail data reports come out this morning. Lets see what they do to the markets. That will really dictate what we do next.
Until next time.
The SPX opened down 6 points so our play was alas not filled.
Economic data made the Bears growl yesterday led by disappointing same-store retail sales data. On top of this, the trade deficit widened, which is likely to drop first quarter GDP below 1.0 percent.
The trade deficit widened to $-63.9 billion from $-57.9 billion in February. This was much worse than estimates for a figure of $-60.1 billion. Of course, oil import prices were the culprit and this isn’t likely to change for April either. Some economists feel GDP growth will come in between 0.5 percent and 0.8 percent when revisions are released from 1.3 percent initially.
A day ahead of the retail sales data for April, same-store sales results seriously disappointed. Though an early Easter is partly to blame, high fuel prices, a weak housing market and weather issues all combined to create the weakness.
And if that wasn't enough crude prices rose slightly Thursday, up 26-cents to $61.81. On Wednesday, prices fell following a strong gain in weekly inventory data for crude and gasoline. Gasoline prices saw a stronger gain today, up more than four percent. Though inventories did pick up last week, there are concerns in the market that supply will not be able to keep up with demand during the summer and that this could push prices even higher.
The PPI and retail data reports come out this morning. Lets see what they do to the markets. That will really dictate what we do next.
Until next time.
# posted by Paul @ 6:42 AM 
