Retail sales in the United States for the month of September rose 0.7% against an expectation of -0.2%. The August impression was also revised up from 0.7% to 0.9%. It seems Americans have not been affected Again by any increase in costs due to supply chain issues. Retail sales excluding MoM autos for September rose 0.8% against an expectation of 0.5% and an August revision of + 1.8% to + 2%. However, we would be remiss if we didn’t notice that the New York State Empire Index for October was only 19.8 vs. 27 expected and a September impression of 34.3. The New York State Index is the first of October’s regional manufacturing draws. This indicates a slowdown in the growth of factories (mainly due to longer delivery times and higher prices paid). Linking the New York State manufacturing index to retail sales (one month behind), he suggests that while Americans still buy, they wait longer and pay more for the same products. Look at the manufacturing indices over the next few weeks to see if this is the start of a trend.

S&P 500 ‘Ignores’ Strongest Retail Sales Data, Rising Above 61.8% Fibonacci Retracement From All-Time Highs on September 3e to October 1 lowst, at 4440.5, In addition, the large-cap index moved back above the 50-day moving average, which it has not traded above since September 17e. By “ignore” it means that since March 2020 the good data is bad for the stock markets as it would mean that the Fed is closer to reducing monetary stimulus. Is it possible that the S&P 500 is already setting a price on November 3e conical ad? Horizontal resistance is at September 27e highs of 4485, then previous all-time highs at 4551. Support is at the 50 day moving average near 4440.1, October 7th highse near 4431.8 and October 14e lower at 4364.7.

Source: Tradingview, Pierre X

In contrast, EUR / USD barely moved. After yesterday’s shooting star candle (a reversal signal), the pair drifts into yesterday’s range between 1.15839 and 1.16244. As New York State’s retail sales and manufacturing index don’t seem to affect the US dollar, it looks like the pair is waiting for the next catalyst. (Note that if the EUR / USD closes above 1.15839, this will invalidate the shooting star). Resistance is at the previous low of 1.1664, ahead of the 50 day moving average at 1.17173. The first support is on October 12e 15 month low at 1.15245, then a confluence of support between 1.14902 and 1.15149. Note that the RSI has unwound from oversold levels, giving the green light for the pair to fall.

Source: Tradingview, Pierre X

Markets appear to be ignoring the stronger retail sales impression heading into the weekend. The profit season continues into next week, with NFLX being the first FANNG to report. Watch business advice to see if they are concerned about supply chain issues or higher inflation. Profit forecasts could be the next catalyst!


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