Stock Market Update

The stock market remains on track for a lower opening after a busy slate of economic data.

Total retail sales were up 0.2% month-over-month in June (Briefing.com consensus: 0.2%) following an upwardly revised 1.0% increase (from 0.9%) in May. Excluding autos, retail sales were down 0.2% month-over-month (Briefing.com consensus: 0.1%) following an upwardly revised 1.0% increase (from 0.8%) in May.

The key takeaway from the report is that the headline disappointments are misleading, as they were driven primarily by gasoline station sales (-5.3%). Excluding gasoline stations, retail sales were up a solid 0.7% in June on the heels of a 0.9% increase in May.

Initial jobless claims for the week ending July 11 decreased by 8,000 to 208,000 (Briefing.com consensus: 219,000). Continuing jobless claims for the week ending July 4 were down 16,000 to 1.805 million. The key takeaway from the report is that initial jobless claims remain historically low and a signpost for a labor market that is still light overall on layoff activity.

The Philadelphia Fed Index surged to 41.4 in July (Briefing.com consensus: 11.0) from 10.3 in June. The dividing line between expansion and contraction for this report is 0.0, so the July reading marks a notable acceleration in manufacturing activity in July in the Philadelphia Fed region versus the prior month.

The key takeaway from the report is that its strength was concentrated in new orders, shipments, and employment conditions, all of which were pitted against a relatively tame bump in the prices paid index.