After the inflation upside surprise, Thursday’s employment report and retail sales also confirmed the excellent state of the economy in the United States of America. Ahead of next week’s FOMC meeting, these data confirm that we can count on the more hawkish stance of the FED in the statement after the meeting.
Nasdaq composite, falling under 12,000, seems to have breached the primary support and opened the doors for further reductions.
At the time of writing and just a few hours after opening on Thursday, September 15, the Dow Jones Industrial Average was down 77 points, or about 0.25%, while the S&P 500 was down 0.7%, and the NASDAQ Composite was losing more than 1%.
According to the Census Bureau data, US retail sales in August increased by 0.3%, much more than forecasts, confirming that even if higher prices could somehow increase the nominal numbers, actual retail sales, despite higher inflation, raised as consumers still spent more money. At the same time, the labor market also continued its growth trend. New claims for unemployment benefits came in at 213,000 last week, less than 226K expectations.
While these data confirm the healthy situation of the economy in the United States and lift the expectations for more hawkish measures from FED, US bond yields continued to rise with more spread between the two and 10-year bond yields. 10-year bond yields were last seen at 3.47%, while 2-year yields rose to 3.87%.
The adverse reaction of stock markets to these data was not out of mind, while technically, also leading indices have a bearish form. Among leading indices, the Nasdaq composite falling under 12,000 seems like it breached the primary support and opened the doors for further reductions.