US retail sales drove the main market move on Friday, as a weaker-than-expected July reading pushed the dollar lower against major currencies.
The report showed headline sales fell 0.6% in July, missing expectations for a 0.1% rise and following a 0.2% gain in June. Sales excluding autos dropped 0.3%, while the retail control group fell 0.4%. It was the first monthly drop in headline retail sales in nine months.
The dollar fell against all major peers. The biggest declines came against the New Zealand dollar and the Canadian dollar. Meanwhile, the yen and Swiss franc posted the smallest gains versus the U.S. currency.
US Retail Sales Hit Consumer Outlook
Other U.S. data also pointed to softer consumer trends. The preliminary University of Michigan consumer sentiment index for August fell to 51.0 from 55.2 in July. That was below the 54.5 expected.
Current conditions came in at 51.8, versus 55.0 expected. Expectations fell to 50.6, compared with a 55.2 forecast. However, inflation expectations stayed firm, with the one-year measure at 4.3% versus 4.2% before, while the five-year reading held at 3.3%.
Chicago Fed President Austan Goolsbee said U.S. GDP and labor markets remain basically stable. He also said one weak retail sales report should not carry too much weight. Additionally, he said more data is needed and noted that recent CPI reports were encouraging.
Yields Rise as Stocks End Mixed
Even as the dollar weakened, U.S. yields moved higher. The 2-year yield rose 3.1 basis points to 4.171%, while the 10-year climbed 5.1 basis points to 4.692%. The 30-year yield added 4.9 basis points to 5.260%.
U.S. stocks ended the day mixed. The Dow Jones Industrial Average fell 108.01 points, or 0.20%, to 53,737.38. The S&P 500 lost 13.23 points, or 0.17%, to 7,785.75, and the Nasdaq Composite dropped 73.86 points, or 0.28%, to 26,729.16.
By contrast, the Russell 2000 rose 15.59 points, or 0.51%, to 3,068.42, setting a record close. The Nasdaq 100 slipped 38.36 points, or 0.13%, to 30,046.14.
In Europe, shares closed mostly lower as benchmark yields jumped. Germany’s DAX rose 0.51% to 26,432.87, while France’s CAC 40 fell 0.16%, the FTSE 100 lost 0.21%, Spain’s Ibex slipped 0.06%, and Italy’s FTSE MIB declined 0.20%.
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Source: InvestingLive
