Featured Market Data
Retail Sales Lower in July
U.S. retail sales, a gauge for consumer spending fell 1.1% in July following an upwardly revised 0.7% increase in June. Underlying data suggests that consumers are beginning to curb spending on goods in favor of services following the reopening of the economy. Sales dropped across various categories including autos, clothing, sporting goods, and furniture. Excluding autos, sales dropped 0.4% in July. Economists forecast consumer spending to grow at an annualized 4.5% pace during the third quarter, a sharp decline from the robust 11.8% rate seen in the second quarter. Looking ahead, the emergence of the COVID-19 delta variant poses a risk to economic growth and could curb demand for services such as tourism and entertainment.
Source: Bloomberg, www.census.gov/retail
Recent News
Stocks Reach New Highs
Major U.S. equity indices were higher in August, with the S&P logging its seventh straight monthly gain while setting twelve new record-high closes. The path of least resistance was clearly to the upside for the month, with the “buy-the-dip” and “there-is-no-alternative” mantras still in play. However, there are some signs this strong run could stall or reverse. U.S. consumer sentiment as measured by the University of Michigan fell to its lowest level in a decade and may have been influenced by a resurgence in the pandemic. In addition, while reflation trades dominated the first half of 2021, defensive stocks like healthcare and utilities have outperformed sectors such as materials, emerging markets and value stocks in recent weeks.
