Stocks Lower as Tapering is Being Priced In!
Stocks on Wall Street opened higher thanks to a strong retail sales report and jobless calims. Investors sold into the rally pushing indexes lower as obstacles for a tapering are removed one by one! The market is in the midst of its biggest weekly drop since August. The jobless claims data and retail sales figures had little effect on the market and there is nothing left scheduled on the economic calendar this week that would have more of an impact. The 0.7% November U.S. retail sales rise with a 0.4% ex-auto increase beat forecasts thanks to big 1.8% climbs for both auto dealer sales and sales of building materials, alongside a slightly stronger than expected 0.5% increase for retail sales ex-autos, gasoline and building materials component that drives “real” consumption estimates. Broad-based upward revisions lifted both the October and September figures. Analysts raised our Q4 GDP growth estimate to 1.8% from 1.5% alongside a boost in our Q4 real consumption growth estimate to 3.5% from 3.0%. Analysts still expect an unrevised 3.6% Q3 GDP growth rate, but with a $1 B real consumption boost, alongside small but offsetting adjustments in the factory and wholesale inventory figures. Analysts now assume a 0.6% (was 0.5%) November PCE gain with the same “real” increase, alongside an assumed flat PCE chain price figure that sits just short of our 0.1% forecast for November CPI.
Market is down to support levels. If we close lower than the orange line, we could see lower price action in the near future.
We are keeping the SPY and QQQ trade open and looking for 1 % gain and we are looking at the price action.
The Nasdaq is a bit more stronger but it is also near mayor support
