Don’s Notebook June 14, 2018

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Yesterday’s FOMC statement said household spending has picked up indicating strength for today’s retail sales report. Confirmation came this morning in the US Commerce Department’s Retail Sales report.

  • Retail sales jumped 0.8 percent in May topping most estimates. And the results include an upward revision to April which now stands at a 0.4 percent gain.
  • The report also shows balanced gains including a 1.3 percent jump at restaurants and a 0.5 percent increase for motor vehicles, both pointing to rising discretionary demand.
  • Strong retail sales are generally bearish for the bond market and generally favorable for the stock market, particularly retail stocks.

Overnight Markets:

  • MSCI Asia Pacific Index declined 0.9 percent
  • Japan’s Topix index closed 0.9 percent lower as the Fed decision and a threat from President Trump to “strongly” crack down on trade with China rattled investors.
  • In Europe, the Stoxx 600 Index was trending lower, as traders awaited the monetary policy decision from the European Central Bank.

Notable Earnings Calls:

  • Adobe Systems, Finisar, Jabil Cherokee, Bluestem Group and Fred’s

The World Cup of Soccer kicks off with tournament host Russia playing Saudi Arabia.

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