[BRIEFING.COM] Stocks are trying to keep their weekly gains intact, but reports that President Trump still wants to pursue tariffs on $200 billion worth of Chinese goods have the major indices at session lows at midday. The S&P 500 is down 0.1%, while the Dow Jones Industrial Average and the Nasdaq Composite show losses of 0.2% apiece.
In addition to the tariff headlines, investors are little uneasy following news that President Trump's former campaign manager, Paul Manafort, has pleaded guilty to conspiracy charges and has agreed to cooperate with special counsel Robert Mueller's ongoing investigations under a new plea deal, which potentially puts the president in harm's way.
A big batch of economic data was released this morning, highlighted by the August Retail Sales report, which showed a lower-than-expected increase of 0.1% (Briefing.com consensus +0.4%). However, the July reading was upwardly revised to +0.7% from +0.5%. The full batch of data is covered in greater detail below.
The S&P 500 held a slim gain through much of the morning, underpinned largely by upbeat performances from the financials (+0.5%) and energy (+0.6%) sectors. Those groups are today's top-performing sectors, while eight of the nine other spaces trade in negative territory. The lightly-weighted real estate sector (-1.1%) is at the back of the pack.
In earnings news, Adobe Systems (ADBE 275.60, +7.08) is up 2.6% after reporting above-consensus earnings and revenues. Meanwhile, Dave & Buster's (PLAY 62.05, +4.53) has spiked 7.9% after also beating top and bottom line estimates. PLAY shares are at their best level in more than a year, while ADBE shares have hit a new record.
Looking at other markets, U.S. Treasuries are under pressure today, pushing yields higher across the curve; the benchmark 10-yr yield is up three basis points at 2.99%, which marks its highest level in more than a month. Meanwhile, the U.S. Dollar Index is up 0.4% at 94.90 after falling to a two-week low on Thursday.
Hurricane Florence made landfall in North Carolina this morning as a Category 1 storm -- down from a Category 4 earlier in the week. Crude futures have been up and down this week with investors trying to gauge the hurricane's potential impact on supply and demand. Today, WTI crude is up 0.7% at $69.10/bbl, extending its weekly gain to 2.0%.
Reviewing today's economic data, which included August Retail Sales, August Import/Export Prices, August Industrial Production and Capacity Utilization, July Business Inventories, and the preliminary reading of the University of Michigan Consumer Sentiment Index for September:
- August retail sales rose 0.1% (Briefing.com consensus +0.4%), while the July increase was revised to 0.7% from 0.5%. Excluding autos, retail sales increased 0.3% in August (Briefing.com consensus +0.5%), and the July increase was revised to 0.9% from 0.6%.
- The upward revisions to the prior month helped mitigate some of the headline disappointment for August, yet the key takeaway from the report is that consumer spending is up and will continue to support real GDP growth in the third quarter.
- Import prices declined 0.6% in August after sliding a revised 0.1% in July (from 0.0%). Excluding oil, import prices slid 0.1% in August after slipping an unrevised 0.3% in July.
- The key takeaway from the report is the recognition that nonfuel import prices have declined for three straight months, underscoring perhaps some of the effects of a stronger dollar. The moderation in nonfuel import prices could help temper budding inflation concerns for the time being.
- Industrial Production rose 0.4% in August (Briefing.com consensus +0.4%), while the July increase was revised to 0.4% (from 0.1%). Meanwhile, Capacity Utilization came in at 78.1% (Briefing.com consensus 78.3%), up from a revised reading of 77.9% in July (from 78.1%).
- The key takeaway from the report is the understanding that factory output was unchanged, excluding the gain in motor vehicles and parts.
- Business Inventories rose 0.6% in July (Briefing.com consensus +0.6%). The June reading was left unrevised at +0.1%.
- The key takeaway from the report is that business sales continued to outpace inventory growth year-over-year, which is a favorable trend that carries the potential to lead to a better pricing environment for businesses.
- The preliminary reading of the University of Michigan Consumer Sentiment Index for September rose to 100.8 (Briefing.com consensus 97.0) from 96.2 in August.
- The key takeaway from the report is that the pickup in sentiment was widespread across all major socioeconomic groups, which is a good underpinning for solid consumer spending activity.