Weak retail sales data and ongoing trade concerns caused socks to move lower, offsetting positive corporate earnings results. US retail sales unexpectedly fell 0.3% in September, upsetting expectations of a 0.3% gain. Excluding autos, retail sales figures came in down 0.1% when a 0.2% increase was anticipated.
Why the drop on weak retail sales? For some investors, it’s another signal for a potential recession. US manufacturing is already contracting, and global economic indicators are pointing to slower growth. At the center of all this is the US-China trade war which continues to add to uncertainties.
When the future is uncertain, spending–on a consumer and business level (think “infrastructure”)–gets curtailed, as planning for the future becomes increasingly difficult. The last point–business spending–is critical, for when business can’t plan ahead, the supply chain gets disrupted.
The WSJ reported on questions concerning Chinese purchases of US ag products–namely how much (and for how long) China intends on buying. This report came after both parties had agreed to explore a broader deal. According to Bloomberg news, China’s impending purchases may be contingent on the US rolling back some of its tariffs on Chinese goods.
The Dow fell 22.82 points, or 0.1%, the S&P 500 closed down 0.2% while the Nasdaq slid 0.3%.
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