Retail Sales & Consumer Demand - Doo Prime News
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Retail Sales & Consumer Demand

Stocks rallied on Friday, 12 November 2021, led by technology and communication services. However, the major averages finished lower for the week as inflationary pressures continued to reverberate through markets. 

The October Consumer Price Index that was released on Wednesday, 10 November 2021, shows that inflation ran hotter than at any time in 30 years, but Friday’s report on plunging consumer sentiment prompted hope among traders that the Federal Reserve would delay any interest rate hikes.  

While global stocks secured their first weekly drop since early October, their losses have been muted compared with the gyrations in the bond market. 

The major averages ended the week with modest losses of less than 1%, but all remain within striking distance of their all-time highs. U.S. Treasury prices tumbled, driving the benchmark yield on the 10-year note up almost 12 basis points on the week, to 1.57% 

Here are the closing levels on Friday: – 

 Last Change %Change 
Dow Jones 36,100.31+179.08 +0.50% 
S&P 500   4682.85+33.58  +0.72%
Nasdaq Comp 15860.96+156.68 +1.00%
US 10Y 1.57%  
VIX   16.29  -1.37 -7.76%

There were 2 articles on Bloomberg last week talking about Retail Sales and consumer demand in the U.S. 

Households have amassed more than $2 trillion in excess savings during the Coronavirus crisis. This is thanks to the lockdowns during which spending was curtailed, the unprecedented stimulus money from the government, as well as the boom in equities and housing values. At the same time, as shown in a government report, the labor market is strengthening, with hiring and wages rising. 

The second article states that the upcoming Black Friday deals will not be good as demand swamps supply. What does this mean for big retailer earnings? We will have to see if demand is good enough even without the discounts. And also, how inflation factors into an already nervous market. 

For now, it still looks like inflation will continue to be the focus, but the market will look for any excuse to buy this market. Anytime there is market positive news it has led to a rebound or rally of some sort. 

It is hard to think that this pattern won’t continue for now. 

Source: CBOE, Reuters, Bloomberg  

This commentary is written by James Gomes 
James has been in the finance industry for over 30 years and most recently worked for a large US bank for more than 20 years. 

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