U.S. retail sales in sharp focus

[Pelican Press 0]

U.S. retail sales in sharp focus

Customers visit the Macy’s Herald Square store in New York City on Dec. 17, 2023.

Kena Betancur | Corbis News | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Stocks end mixed   
Wall Street ended mixed Wednesday, dragged down by tech stocks as investors await key updates on retail sales and producer prices. The S&P 500 and the tech-heavy Nasdaq Composite slipped 0.19% and 0.54%, respectively. The 30-stock Dow, on the other hand, added 0.1%.

Palantir CEO on backing *******
Palantir CEO Alex Karp said his outspoken pro-******* views have caused staff to leave the company and that he expects to see more walk out. “If you have a position that does not cost you ever to lose an employee, it’s not a position,” Karp said in an interview on CNBC.

House passes TikTok bill
The U.S. House of Representatives passed a bill that could lead to a ban against TikTok if its ******** owner, ByteDance, doesn’t sell its stake in the popular video app. The bill now heads to the Senate where it faces steep hurdles as senators are divided over the legislation.

EV hype may be over
The euphoria around electric vehicles is waning. Ford Motor, General Motors and Mercedes-Benz are some of the major automakers that are scaling back or delaying their EV plans. This comes as the sector sees lower rates of growth and a slower pace of adoption than previously expected. 

[PRO] China stocks worth the risk
******** stocks are a “risk worth taking,” said Jason Hsu, chairman and chief investment officer of Rayliant Global Advisors. He noted they are “trading at the cheapest” while offering “a big discount,” and sees huge opportunities to play the market.

The bottom line

********* consumers started the year on shaky footing but a bounce back could be in sight.

February’s retail sales data will be in focus today and should bring insight into the state of the U.S. economy.

Economists expect consumer spending to rebound strongly after January’s sharp retreat.

“The January slowdown somewhat overstates the near-term pullback in consumption. Households are still benefiting from a real income tailwind that should remain supportive of spending in the near term,” Wells Fargo wrote in a note.

“We expect to see a rebound in February spending and forecast retail sales advanced 0.8%.”

Consumer strength has underpinned overall economic growth and has proven far more resilient than most policymakers and economists predicted.

Yet, sticky inflation could take a toll and risk growth prospects ahead.

“The case for a gradual but sustained slowdown in growth in consumers’ spending from 2023’s robust pace is persuasive,” wrote Pantheon Macroeconomics in a note.

“Most households have run down the excess savings accumulated during the pandemic, while the cost of credit has jumped and last year’s plunge in home sales has depressed demand housing-related retail items like furniture and appliances.”

Investors will also be watching out for February’s producer prices print due today, any upside surprises like January’s hot print could further complicate the inflation picture for the Fed.  

The report is the last major piece of economic data to be released prior to the central bank’s policy meeting next week. 

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