Retail Sales and CPI Exceed Expectations, Stock Market Reacts
By On Wednesday, stocks rose after the release of stronger-than-expected retail sales, which initially raised fears about higher interest rates.[0] The Commerce Department's Retail Sales for January showed an increase of 1.7 percent, while it was down 1.1 percent in December. In January, the headline consumer price index rose 6.4% year-over-year, a decrease of one-tenth of a percent from the 6.5% increase seen in December.[1] The core reading, not including items that are prone to fluctuation such as food and energy, decreased for four months in a row to 5.6%.[2] It is anticipated that the monthly revenue will increase by 0.5%, while the yearly revenue is expected to grow by 6.2%.[0] It is anticipated that the core Consumer Price Index (CPI), which omits fuel and energy prices, will increase by 0.4% for the month and 5.5% over the course[0]
The Federal Reserve has been closely analyzing data concerning inflation and employment as it mulls over its next decision on rates. The market anticipates that the benchmark rate will be raised another quarter of a percentage point when the Reserve meets next month.[3] Analysts anticipate that the benchmark rate will reach over 5% at some point during the summer months, prompting the Federal Reserve to halt its rate hikes.[3]
Also on Monday, the Dow Jones Industrial Average lost 32 points, or 0.1%, while the S&P 500 futures lost 0.1%, and Nasdaq Composite futures lost 0.2%.[4]
Companies reporting earnings on Wednesday include Cisco Systems Inc (NASDAQ:CSCO), Shopify Inc (NYSE:SHOP), Airbnb Inc (NASDAQ:ABNB) and Marriott International Inc (NASDAQ:MAR).[3] The beverage giant Coca-Cola Co (NYSE:KO) is expected to report earnings of 45 cents a share on revenue of $10 billion.[5] It is anticipated that Shopify Inc (NYSE:SHOP), an e-commerce website host, will post a loss of 1 cent per share on revenue of $1.65B.[3]
At 10.00 am ET, the Business Inventories for December issued by the Commerce Department will be released.[6] The increase of 0.3 percent has been agreed upon, as it was up 0.4 percent in November.[6]
At 7:20am Eastern Time, the Dow Jones Industrial Average futures were 20 points lower, the S&P 500 futures were down 495 points, and the Nasdaq 100 futures were up 15 points.[7]
0. “Consumer prices, Coca-Cola, Travel earnings: 3 things to watch By Investing.com” Investing.com, 13 Feb. 2023, https://www.investing.com/news/stock-market-news/consumer-prices-cocacola-travel-earnings-3-things-to-watch-3002096
1. “The Club's top 10 things Tuesday: CPI, volatile market, oil dips” CNBC, 14 Feb. 2023, https://www.cnbc.com/2023/02/14/the-clubs-top-10-things-tuesday-cpi-volatile-market-oil-dips.html
2. “Market Caution Returns on Hot US CPI Data” Action Forex, 15 Feb. 2023, https://www.actionforex.com/contributors/fundamental-analysis/486470-market-caution-returns-on-hot-us-cpi-data/
3. “Retail sales, Cisco earnings, Shopify results: 3 things to watch” Yahoo! Voices, 14 Feb. 2023, https://www.yahoo.com/now/retail-sales-cisco-earnings-shopify-154646688.html
4. “Stocks Poised for Lower Open on Monday” Barron's, 12 Feb. 2023, https://www.barrons.com/articles/stocks-poised-for-lower-open-on-monday-d9998ebf
5. “Coca-Cola, Marriott International And 3 Stocks To Watch Heading Into Tuesday – Arista Networks (NYSE:ANET” Benzinga, 14 Feb. 2023, https://www.benzinga.com/news/earnings/23/02/30892973/coca-cola-marriott-international-and-3-stocks-to-watch-heading-into-tuesday
6. “Wall Street Might Open Broadly In Negative Territory” RTTNews, 15 Feb. 2023, https://www.rttnews.com/3344275/wall-street-might-open-broadly-in-negative-territory.aspx
7. “Dow futures tick lower, CPI in focus By Investing.com” Investing.com, 12 Feb. 2023, https://www.investing.com/news/stock-market-news/dow-futures-tick-lower-cpi-in-focus-3001275
