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Briefing.com Summary:
*U.S. data mixed—retail sales strengthened with revisions; import prices rose; Empire State manufacturing accelerated; geopolitical meeting looms.
*Import price uptick clouds inflation outlook, raising tariff-pass-through concerns despite flat year-over-year comparison.
*Dow outperforms as UnitedHealth (UNH) surges on 13F disclosures
There is a lot on the market's plate today, yet judging by the week-to-date returns, investors have been getting their fill of dessert already. The Russell 2000 is up 3.6%, the S&P Midcap 400 is up 2.1%, the Dow Jones Industrial Average is up 1.7%, and the Nasdaq Composite and S&P 500 are up 1.2%.
The Dow is coming back for more, with UnitedHealth (UNH) serving up some big gains. It is up 10% following disclosures by several large investors in their 13F filings, including Berkshire Hathaway (BRK.B) and Appaloosa, that they are taking new stakes or increasing their positions in the embattled health insurer's stock.
The other indices aren't looking as hungry at the moment. Some disappointing fiscal Q4 guidance from leading chip equipment maker Applied Materials (AMAT), a slate of disappointing economic data out of China, and some mixed data out of the U.S. have kept their appetites in check.
Currently, the S&P 500 futures are up eight points and are trading 0.1% above fair value, the Nasdaq 100 futures are down 25 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are up 266 points and are trading 0.6% above fair value.
The July Retail Sales Report was a good report that was made even better by the upward revisions to the prior month's data. Total retail sales increased 0.5% month-over-month, as expected, following an upwardly revised 0.9% (from 0.6%) in June. Excluding autos, retail sales increased 0.3% month-over-month, as expected, following an upwardly revised 0.8% increase (from 0.5%) in June.
The key takeaway from the report, which isn't adjusted for inflation, is that it reflects a decent pace of consumer spending that isn't owed entirely to price increases; however, it does reveal a few points of spending caution, evidenced by the 0.6% decline in electronics and appliance stores, the 1.0% decline in building material and garden equipment and supplies dealers, and the 0.4% decline in food services and drinking places.
The July Import and Export Price Indexes sent some mixed signals.
Import prices were up a sizable 0.4% month-over-month, but down 0.2% year-over-year, on the heels of a 0.1% decline in June. Excluding fuel, they were up 0.3% month-over-month, and up 0.9% year-over-year, following a 0.3% decline in June. Export prices increased 0.1% and were up 2.2% year-over-year. Excluding agricultural products, prices were also up 0.1% and up 2.0% year-over-year.
The key takeaway from the report is the uptick in import prices, which is clouding the inflation outlook in the sense that it is keeping the market guessing as to whether tariff inflation is going to ramp up in coming months or if this is just a one-time bump in the road.
The August Empire State Manufacturing Survey showed a nice uptick to 11.9 (Briefing.com consensus: 0.0) from 5.5 in July. The dividing line between expansion and contraction for this survey is 0.0, so the August reading reflects manufacturing activity for the New York Fed region picking up pace from July.
Separately, there will be added attention on the pace of things in Alaska today, which is where President Trump is meeting President Putin with the intent of trying to end the war between Russia and Ukraine. That meeting is scheduled to take place at 3:30 p.m. ET, or shortly before the market closes at 4:00 p.m. ET.
Shortly before today's open, though, the overall action is pointing to a mixed appetite for stocks.
