Wall Street closed mixed as investors weighed fresh signs of a US consumer spending slowdown. Retail business is grounded, and confidence diminished. The S&P 500 slipped 0.33% to 6,941.81.
The Nasdaq Composite fell 0.59% to 23,102.47. The Dow Jones rose 0.10 and gained 52 points. It finished at a record 50,188.14.
The traders put earnings momentum up against softer economic data. There were also worries regarding the issue of artificial intelligence taking over financial services. There was defensive positioning of the sectors.
The volatility remained contained with weakened sentiment. The ambivalent ending was cautious instead of panicky. Markets are waiting to see more evident indicators in spending and employment.
Wall Street screens reflect ambivalent indices as investors respond to less enthusiastic retail information. [Money Control]
Retail Stocks Face Pressure From Weak US Retail Sales
Retailers were the victims of the slowdown fears. The sales in the month of December are stated to be flat. Economists had predicted low growth. The outcome was a definite loss of momentum.
Costco dropped more than 2%. Walmart declined by over 1%. Investors were concerned about the strength of demand during the holiday.
The lighter domestic budgets were a burden. Tighter credit and cost of living were observed by the analysts. These trends indicate a postponement of purchases by consumers.
The underperforming retail sales in the US influenced the general risk appetite. The question of whether spending weakness will continue is now debated by traders. The information boosted the proponents of policy relaxation.
Could Jobs And Inflation Data Change The Outlook?
The focus has been on future macro releases. The US jobs report is released in the middle of the week. Inflation statistics come second. Both will inform the Federal Reserve policy thought. Retail weakness was instantly met in bond markets.
The 10-year yield of the Treasury declined by six basis points. It traded near 4.14%. Reduced yields indicate an increase in the expectations of rate cuts. There are investors who are now pricing down as early as June.
A more moderate inflation might speed that up. Good jobs statistics will postpone action. The equilibrium is fragile. Markets are delicate to all new figures.
Traders check the bond yields and economic indicators before the next action of the Federal Reserve. [Invesco]
Financial Shares Retreat As AI Concerns Mount
Following the increase in worries about technology disruption, financial stocks were performing poorly. A revolutionary AI-based tax planning service alarmed investors.
The opening indicated cheaper and quicker services. Established companies can be under margin pressure. LPL Financial stocks fell at a very high rate.
Charles Schwab and Morgan Stanley were also down. Investors are afraid that automation will reduce fees. Bankers and brokers are reviewing approaches.
The bigger picture is not deteriorating. The S&P 500 controls significant technological aid. The sell-off of the previous week has not halted. Nevertheless, trading desks are ruled by caution.
How Will The US Consumer Spending Slowdown Affect The ASX?
The Australian equity appears poised to take a slight boost. ASX 200 futures rose 29 points. It means an 0.3% open increase. The index could start near 8,848. The local investors monitor US indicators.
The poor American consumption could dampen the interest. The healthcare shares are still a drag following the CSL developments. The worries in the world growth might restrict rallies.
But lower yields can be valuation supporting. There is selective buying, as opposed to general strength, anticipated by traders. Offshore uncertainty is reflected in the local market.
ASX futures tick up as traders in Australia build up to open. [IG Group]
Earnings And Policy Events Keep Investors Alert
Corporate profit is at the centre of focus. Commonwealth Bank was able to record a first-half cash profit of 5.4bn. Growth of loans and deposits remained unchanged. The interim dividend declared by the bank amounted to $2.35 per share. Several listed groups report today.
Some of the names are AGL Energy and Evolution Mining. Also present are property trusts and industrial companies. The session will feature the speeches of policymakers.
The commentary of the Reserve Bank can change the expectation of the rate. China inflation and US payrolls are risky offshore. Investors gear up for the next volatile week.
Also Read: Sonic Healthcare Share Price Vs Nanosonics Faces Technical Pressure On ASX
FAQs
Q1: What caused the US consumer spending slowdown?
A1: Flat December retail sales signalled weaker household demand and tighter budgets.
Q2: How did markets react to the weak US retail sales report today?
A2: The S&P 500 and Nasdaq fell, while the Dow edged higher.
Q3: Could the Federal Reserve cut interest rates sooner?
A3: Lower yields suggest markets expect possible cuts from June.
Q4: What does this mean for Australian investors?
A4: ASX gains may stay modest as global spending trends influence sentiment.
