Wall Street penalized by unexpected retail sales

Wall Street penalized by unexpected retail sales


Wall Street ended slightly lower Wednesday, penalized by the drop of US retailers in September and the progress of negotiations between London and the European Union on Brexit. The publication of an unexpected drop in retail sales in the United States in September has raised fears of a cyclical slowdown linked to the trade war, despite the recent truce announced last Friday between Washington and Beijing.

Its flagship index, the Dow Jones Industrial Average, fell 0.08% to 27,001.98 points. The Nasdaq, added 0.30%, at 8,124.18 points, and the broad index S & P 500 dropped 0.20% to 2,989.69 points. The previous day, the three indices had advanced about 1% supported by good banking results and hope for an agreement on Brexit.

In the United States, the announcement of a 0.3% decline in retail sales in September compared to August has sent a cold, while economists expected on the contrary month-on-month increase of 0.3%, following a 0.6% increase in August.

Excluding cars, US retail sales slipped 0.1% in September, against a positive market consensus of +0.2%, and after a +0.2% gain a month earlier. Finally, excluding cars and gasoline, retail sales, the engine of US growth, are totally stable – against +0.3% consensus and +0.4% in August 2019. Positive all the same, these figures depressed by consumption in the US should raise the probabilities of lower rates at future monetary meetings.

Sales at U.S. retailers, which accounts for more than two-thirds of US GDP, has so far been resilient to the consequences of the US-China trade war. The September figures therefore seem to show a beginning of reluctance on the part of American consumers.

Abbott, the US pharmaceutical and medical group, announced profit for the third fiscal quarter in line with expectations, but its revenue narrowly missed consensus. Quarterly net earnings were $960 million and 53 cents per share, compared with $563 million and 32 cents per share a year ago. Excluding non-recurring items, adjusted earnings were 84 cents, compared to 75 cents a year earlier and 84 cents consensus. Revenues rose 6 percent year-over-year to $8.08 billion, but the inevitable market consensus was at $8.1 billion. The group expects an adjusted EPS of 94-96 cents for the fourth fiscal quarter, while guidance 2019 is tightened between $3.23 and $3.25 per security.

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