Stock Market Down Ahead of Retail Sales & Business Inventories Reports (INDEXSP: .INX)

Before The Bell: S&P 500

Prospects of another effective vaccine helped boost Wall Street to fresh highs on the Dow and S&P 500, while the NASDAQ lagged as stay-home shares were a drag. Gains were broadbased, but led by a hefty 6.5% jump in energy amid improving prospects that economies will be able to get back to normal sooner than expected. Treasuries were little changed.

Though yields were generally weaker on the day, losses were pared and the front end closed with modest gains. The 2-year was at 0.177%, and the 10-year finished at 0.906%, with the 30-year at 1.661%. While some profit taking could weigh on stocks, optimism on the recovery should continue to dominate and overshadow the bearish effects of record virus cases and renewed lockdowns.

The markets appear to be setting up for a bearish open which we think is because of the renewed lockdowns and correction from recent highs.

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DJIA F29,711-154-0.52%
S&P F3,607.25-15.75-0.43%
NASDAQ F12,045.2540.250.34%
Gold1,886.90-0.90-0.05%
Silver24.730-0.072-0.29%
Crude Oil41.29-0.05-0.12%

There is a lot on today’s calendar, with the October retail sales, report headlining. We’re forecasting a 0.7% increase after the prior 1.9% jump. Excluding autos, sales should be up 0.8% from 0.6% in September. October industrial production is forecast to have rebounded 1.7% from -0.6% previously, while capacity utilization should rise to 72.8% from 71.5%. October import and export prices are penciled in at 0.3%, after respective gains of 0.3% and 0.6% in September.

Stocks To Watch

TickerLastChangeVolume
Signal
ATHE2.83146.09%115226784Top Gainers
HPR6.9885.64%17775228Top Gainers
CBAT11.383.74%107542896Top Gainers
WWR6.2749.29%36001536Top Gainers
PPSI4.2945.42%12071799Top Gainers
GP16.8934.05%6894197Top Gainers
CBAT11.383.74%107542896New High
SQZ30.3326.37%254647New High
MHLD1.8633.81%5693193New High
HDS55.7724.46%35568096New High
FORM40.467.82%968706Overbought
CBAT11.383.74%107542896Overbought
ATHE2.83146.09%115226784Unusual Volume
KBWP67.053.39%1010725Unusual Volume
HPR6.9885.64%17775228Unusual Volume
FOVL39.633.36%179558Unusual Volume
ACAD54.635.93%1794774Upgrades
ACM50.552.10%2366409Earnings Before
ESXB6.452.71%107846Insider Buying
HOFV1.15-53.82%31190472
Top Losers
RAPT16.41-46.14%5565280Top Losers
FRAN2.49-31.78%1271708Top Losers
PXS0.89-24.68%798871Top Losers
CYRX50.22-14.88%1630339Top Losers
SVT7.34-14.23%25288Top Losers
GPOR0.13-44.14%96837736New Low
HOFV1.15-53.82%31190472New Low
BWL-A8.25-4.84%15139New Low
ATNF2.25-8.16%213327New Low
BVXV2.870.00%349013Oversold
LMNL3.823.80%871469Oversold
FRAN2.49-31.78%1271708Most Volatile
CBAT11.383.74%107542896Most Volatile
NIO45.582.29%306209088Most Active
SNDL0.26-6.61%126995112Most Active
AEP89.21-0.73%4201080Downgrades
AP4.234.44%112565Earnings After
KXIN3.07-1.29%673572Insider Selling

The November NAHB housing market index is expected to dip to 84 from 85 in October. September business inventories are expected to rise 0.6% from the prior 0.3% increase. September Treasury TIC data are due, along with weekly chain store sales. There is Fedspeak from Chair Powell, Barkin, Bostic, Daly, Kashkari, and Rosengren. Today’s earnings calendar has reports from Walmart, Home Depot, Sea Limited, Warner Music Group, Autohome, Aramark, and Kohl’s.

ABS REPORT

US Retail Sales Preview

We expect October increases of 0.6% for headline retail sales and 0.7% for the ex-auto figure, following respective September gains of 1.9% and 1.5%. We saw a -0.5% drop for the CPI gasoline index, though rising sales volume should allow a flat figure for service station sales. Unit vehicle sales dipped to 16.2 mln last month from a 16.3 mln pace in September, which should be offset by a continued rebound for sales of clothing, furniture, electronics, and appliances. Amazon Prime Day was pushed back from July to October 13-14, and this should provide a significant boost for October sales too. Real consumer spending is expected to increase at a 9.0% rate in Q4 after a 40.7% surge in Q3.

US Business Inventories Preview

Business inventories are estimated rising 0.6% in September after a 0.3% August increase. Our forecast incorporates a flat figure for factory inventories, alongside gains of 1.6% for retailers and 0.4% for wholesalers. Sales should rise 0.8% in September, after a 0.6% gain in August. As-expected readings would result in the I/S ratio remaining at August’s 6-year low of 1.32, versus an all-time high of 1.67 in April and a 1.47 peak from the last recession in both March of 2009 and December of 2008. Inventories in the Q3 GDP report showed a -$1.0 bln liquidation rate after a record -$287.0 bln pace in Q2, leaving a fourth consecutive quarterly decline. We expect a $7 bln accumulation rate in Q4, though the rates for both Q3 and Q4 look poised for a $6 bln upward revision. Inventories were already unwinding pre-COVID-19 as earlier tariff front running reversed course before the big Q2 hit, leaving room for the start of a protracted inventory rebound in Q4 of 2020.

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