* Major U.S. indexes lower; FANGs weak, transports gain
* All major S&P 500 sectors down; materials weakest group
* Euro STOXX 600 index up ~0.6%
* Dollar rallies; bitcoin, crude off, gold slides
* U.S. 10-Year Treasury yield ~1.33%
Sept 16 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at markets.research@thomsonreuters.com
U.S. CONSUMERS: DELTA, HURRICANES...WHAT ELSE YA GOT? (1052
EDT/1452 GMT)
Data released on Thursday suggested that the one-two punch
of the Delta variant and Hurricane Ida failed to dampen the U.S.
consumer's spending mood.
Receipts at U.S. retailers unexpectedly
increased by 0.7% in August, defying the -0.8% consensus.
The report from the Commerce Department showed that declines
in spending on autos, electronics and sporting goods was offset
by growth in department stores, furniture, and non-store retail
(which includes e-commerce).
One contributing factor could be shoppers taking advantage
of child tax credit payments amid the back-to-school season,
which helped the headline number overcome persistent supply
constraints including the microchip drought, which has hobbled
the automobile industry, among others.
"The rapid spread of the Delta variant and lingering supply
chain issues affected the spending mix," writes Gregory Daco,
chief U.S. economist at Oxford Economics.
Going forward, Daco sees strengthening support from the
consumer, who contributes about 70% to U.S. economic growth:
"Slowly improving health conditions should support consumer
optimism while a resilient employment recovery, with labor
supply issues gradually easing and wage growth remaining solid,
should support income growth as fiscal transfers fade," Daco
says.
So-called "core" retail sales, which excludes autos,
gasoline, building materials and food services - and closely
corresponds with the personal expenditures component of GDP -
jumped by a robust 2.5% in a rebound from July's 1.9% plunge.
The number of U.S. workers filing first-time applications
for unemployment benefits came in higher last week
as expected, to 332,000 from 312,000, according to the Labor
Department.
The print was just a hair above the 330,000 analysts
expected, but remained well above the 200,000 to 250,000 range
associated with healthy labor market churn.
Ian Shepherdson, chief economist at Pantheon Macroeconomics,
doesn't believe last week's increase is cause for much concern.
"Claims were pushed up by a combination of less-friendly
seasonal adjustments for the week of Labor Day, and - probably -
claims which were delayed by Hurricane Ida," Shepherdson says.
"The underlying trend in claims continues to fall."
Ongoing claims, reported on a one-week lag,
unexpectedly slid by 6.6% to 2.665 million, a move possibly
attributable in part to emergency benefits expiry.
Mid-Atlantic factory activity shifted into overdrive last
month.
The Philadelphia Fed's business index (Philly Fed)
defied economist projections by surging to a
reading of 30.7 instead of easing to 18.8 as forecast.
The jump echoes the Empire State Index's similar thrust on
Wednesday, as seen in the graphic below.
A Philly Fed/Empire State reading above zero signifies
expanded activity over the previous month.
"Alongside the big jump in the Empire State index, this
suggests that manufacturing in the Northeast, at least, is
outperforming," Shepherdson adds.
Finally, in more ancient history, the Commerce Department
reported that the value of goods stocked in the storerooms of
U.S. businesses increased by 0.5% in July, a
consensus bulls eye.
And while the number amounts to a deceleration from June's
0.9% increase, it also marks the 12th straight month in the plus
column.
This bodes well for third-quarter GDP. In the first half of
the year, private inventories - hamstrung by supply constraints
- were a net drag on U.S. economic growth.
The generally upbeat data failed to brighten Wall Street's
mood.
All three major indexes are now lower, with an about-face in
crude prices weighing on energy stocks.
That said, economically sensitive transports are the
green outliers in a sea of red.
(Stephen Culp)
*****
U.S. STOCKS LOSE OPENING BID, RED TAKES HOLD (1005 EDT/14005
GMT)
Early Dow and S&P 500 strength on the back of
stronger-than-expected retail sales data, has quickly faded with
both indexes now trading modestly lower. The Nasdaq,
which failed to climb into positive territory, is taking the
biggest hit given tech and FANG weakness.
All major S&P 500 sectors are now down on the day. This as
the U.S. 10-Year Treasury yield has seen a near 10
basis point pop off Wednesday's intraday low.
The NYSE FANG+TM index is sliding nearly 1%, while
tech and communication services are among
weaker sectors. With this, there is a tilt in favor of value
over growth.
Of note, the S&P 500's rising 50-day moving average, which
has supported the market this week, now resides around 4,433.
Meanwhile, amid higher yields, and dollar strength,
silver and gold are weak, leading to sharp losses
in precious metals mining shares .
Here is where markets stand in early trade:
(Terence Gabriel)
*****
SICK INTERNALS MAY KEEP THE NASDAQ BEDRIDDEN (0900 EDT/1300
GMT)
The Nasdaq Composite ended a five-day losing streak
on Wednesday. That said, the Nasdaq McClellan
Summation (McSum), a breadth/momentum measure based on advancing
and declining issues, remains on the back foot suggesting the
Composite may not yet be out of the woods:
Since topping in mid-February of this year at an all-time
high of +1,967, the McSum collapsed to a mid-August low of
-3,829. That was its lowest level since mid-April of last year.
A reprieve into early September stalled toward a resistance
line from its February high, keeping a protracted divergence
with the Composite in place. The McSum ended Wednesday on a down
tick, at -2,632, and closed back below its 10-day moving
average.
Just since late 2018, there have been a number of major and
minor Nasdaq setbacks from record-high territory, all of which
developed in the wake of McSum divergence. Of note, the IXIC has
so far only fallen a little more than 2% on a closing basis from
its Sept. 7 record finish. However, until internals show real
improvement, the Composite's condition may remain tenuous.
What may be especially concerning is that since late 2018,
the McSum has been respecting support and resistance lines drawn
from certain points in 2012. As the market bottomed in December
2018 and again in March 2020, the support line contained McSum
weakness. The McSum's record-high in February was essentially
capped by the resistance line.
Therefore, a greater decline, to once again flirt with the
support line, would call for a slide to the -7,000 area. In that
event, the Composite would be at risk for a larger sell-off amid
what would then be much more intense internal weakness.
(Terence Gabriel)
*****
FOR THURSDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300
GMT - CLICK HERE:
(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)