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- Muted gains after weak Retail Sales 📈
Muted gains after weak Retail Sales 📈
Stocks managed to keep their hot streak alive with thin gains on Tuesday.
Adam Garcia
June 18, 2024
Good Afternoon!
Hey, everyone. It's Adam from Elite Trade Club.
Markets are closed tomorrow for the Juneteenth holiday. We’ll be back on Thursday with more opening & closing bell coverage!
Here’s what moved the market today.
Markets 📈
Stocks posted muted gains in the week’s second trading session after May’s retail sales numbers came in slightly below expectations.
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Market-Moving News 📈
May Retail Sales Rise 0.1%, Weaker Than Expected 📉
Retail spending in May was weaker than anticipated, with sales rising just 0.1%, slightly below the Dow Jones estimate of 0.2%. This figure is adjusted for seasonality but not inflation. On a year-over-year basis, sales increased by 2.3%. The result was marginally better than April’s downwardly revised 0.2% decline.
Sector Performance 🛍️
Excluding autos, retail sales declined by 0.1% against the expected 0.2% increase. Gas station receipts fell 2.2% due to moderating gas prices, while sales at sports goods, music, and book stores rose 2.8%. Online outlets saw a 0.8% increase, but bars and restaurants experienced a 0.4% decline, and furniture and home furnishing stores reported a 1.1% drop.
Market Reaction 📊
Following the report, stock market futures remained flat, and Treasury yields declined. Investors are concerned about the economy's direction and its implications for Federal Reserve monetary policy. Consumer spending, which accounts for about two-thirds of economic activity, showing weakness, could signal slower growth and potentially prompt the Fed to cut interest rates.
Inflation Outlook 📈
Recent inflation data has been somewhat encouraging, with the Commerce Department’s measure showing an annual rate of 2.7% in April, or 2.8% excluding food and energy. The Fed targets a 2% inflation rate. Market expectations are now leaning towards the possibility of two quarter-point interest rate reductions this year, with a 23% chance of three cuts, despite Fed officials indicating the likelihood of just one reduction.
Fed Perspectives 🏦
Philadelphia Fed President Patrick Harker mentioned that rate cuts later this year would be appropriate only if supported by data, envisioning the likelihood of just one move lower. This cautious stance reflects the balancing act the Fed faces in addressing inflation while fostering economic growth.
Top Winners and Losers 🔥
Comtech Telecom [CMTL] $4.08 (+88.0%)
announced a fresh credit facility as part of its Q3 FY24 financial result and posted EPS that topped analysts’ expectations.
Actellis Networks [ASNS] $2.12 (+84.3%)
announced a new partnership with Carahsoft that will broaden its access to IoT markets for U.S. government agencies.
La Rosa Holdings [LRHC] $1.79 (+72.1%)
announced a plan to acquire a controlling interest in Red Door Title.
Zentalis Pharma [ZNTL] $4.14 (50.6%)
said the US Food & Drug Administration placed clinical holds on three separate studies of its cancer drug, azenosertib.
Aerwins Tech [AWIN] $1.74 (47.9%)
fell after announcing plans to evaluate potential strategic alternatives for its business after Monday’s closing bell.
Interactive Strength [TRNR] $3.23 (34.0%)
pulled back after jumping 70% on Monday, following its implementation of a 1-for-40 reverse split on Friday.
That's it for today! Please, write us back, and let us know what you think of the Closing Bell Roundup. We're always eager to hear feedback from our members!
Thanks for reading. I'll see you at the next open!
Best Regards,
— Adam G.
Elite Trade Club
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