Coffee With Greta: Stocks Slide As Retail Sales Disappoint
DJIA Futures: -374 (-1.1%)
SPX Futures: -54 (-1.4%)
NASDAQ Futures: -201 (-1.7%)
Good morning friends!
Futures are sliding after the release of disappointing retail sales data.
Let’s get right to it!
Retail Sales Drop More Than Expected
Retail sales fell more than expected in November as consumers shift their spending habits due to high inflation.
The Census Bureau reported retail sales fell 0.6% to $689.4 billion.
That was worse than economists’ expectations for a 0.3% decline.
Retail sales were still up 6.5% year over year.
Core retail sales, which exclude auto sales and gas stations, also fell 0.2% monthly and were up 6.7% annually.
Sales dropped 2.3% at car dealers and parts stores, fell 2.6% at furniture and decor retailers, declined 1.5% at electronics and appliance stores, fell 2.5% at building materials retailers.
Grocery store sales rose 0.8%, health and personal care store sales rose 0.7%, and restaurant and bar sales rose 0.9%.
Weekly Jobless Claims Drop to 11-Week Low
Weekly jobless claims fell to an 11-week low in early December.
The Labor Department reported 211,000 Americans filed initial unemployment claims last week.
That was down by 20,000 from the previous week and better than 232,000 expected.
Continuing claims rose by 1,000 to 1.67 million in the week ending December 3.
ECB Hikes Rates, Announces Balance Sheet Reduction
The European Central Bank followed the Fed’s lead overnight, implementing a 50 basis point rate hike.
That takes the bank’s key rate from 1.5% to 2% and is the fourth rate hike this year.
The ECB also announced it will begin reducing its balance sheet in March 2023 by 15 billion euros per month on average.
That balance sheet reduction will continue through the end of Q2 2023.
Musk Sells Off More Tesla Shares
Tesla (TSLA) shares are down 3% ahead of the open after a new filing showed CEO Elon Musk sold off more of the stock this week.
The SEC filing shows Musk sold about 22 million more shares worth around $3.6 billion between Monday and Wednesday of this week.
Many believe the recent sales are linked to Musk’s $44 billion takeover of Twitter.
He told Twitter employees after that deal closed that he sold Tesla shares to “save” their business.
In Case You Missed It
- The Fed hiked the federal funds rate as expected by 50 bps on Wednesday. That puts the rate in a target range of 4.25% to 4.5%, the highest in 15 years. The Fed’s dot plot shows officials expect rates to top out at 5.1% in 2023 with rate cuts not beginning until 2024. The FOMC expects 1% of rate cuts in 2024 and 1% of cuts in 2025, with the longer-run neutral rate at 2.5%.