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DJIA Futures: -250 (-0.7%)
SPX Futures: -26 (-0.6%)
NASDAQ Futures: -71 (-0.5%)
Good morning friends!
Futures are falling as traders digest the latest economic data and earnings.
Let’s get right to it!
Retail Sales Jump
U.S. retail sales rose more than expected in July.
The Commerce Department reported retail sales rose 0.7% last month to $696.4 billion.
That was stronger than expectations for sales to increase 0.4%.
Excluding autos, retail sales jumped 1% vs 0.4% expected.
That number was boosted by a 1.9% increase in online spending, as Amazon (AMZN) Prime Day fell during the month.
Spending at sporting goods stores rose 1.5% with spending at restaurants and bars up 1.4%.
Furniture store sales dropped 1.8% and electronics and appliance store sales fell 1.3%.
Sales at gas stations rose just 0.4% despite higher prices.
Home Depot Sales Slide
Home Depot (HD) shares are down 0.8% ahead of the open despite beating Q2 expectations as sales dropped year over year.
Here’s how the home improvement retailer’s results compared to analysts’ estimates:
- EPS: $4.65 vs $4.45 expected
- Revenue: $42.92 billion vs $42.23 billion expected
It was the first revenue beat in three quarters but sales were down 2% year over year.
Home Depot reiterated its full-year forecast, expecting sales to decline 2% to 5% from a year ago.
The CFO said the company has seen “continued caution on the part of consumers when it comes to larger ticket, more discretionary spending.”
Home Depot also announced its board of directors approved $15 billion in share buybacks.
Fitch Warns About Bank Downgrades
Bank stocks are falling in premarket trade after an analyst at Fitch Ratings warned the agency may be forced to downgrade dozens of banks.
The Financial Select Sector SPDR ETF (XLF) is down 0.9% in premarket trade with the SPDR S&P Regional Banking ETF (KRE) down 1.7%.
Fitch cut the U.S. banking industry’s operating environment score from AA+ to AA- back in June.
If that rating is downgraded again, Fitch would be forced to reevaluate ratings on each of the more than 70 banks it covers.
That could include the country’s two largest banks, JPMorgan Chase (JPM) and Bank of America (BAC).
JPM shares are down 1.5% ahead of the open with BAC shares falling 1.8%.
Coming Up: Homebuilder Sentiment
The National Association of Homebuilders releases its August sentiment index at 10:00 a.m. ET.
Economists expect that index to rise to 57 from 56 in July.
Confidence among builders has been rising in recent months as they see higher demand from buyers who are struggling with low supply of existing homes for sale.