Market Update: Wednesday, August 15, 2018

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Daily Insights

  • Retail sales gain for a sixth consecutive month. U.S. retail sales increased 0.5% in July, posting sixth straight months of growth for the first time since 2014 and handily beating consensus estimates (0.1%). Excluding automobiles and gas, sales rose 0.6%. Consistent growth in retail sales reflects the health of the U.S. consumer, emboldened by fiscal stimulus implemented earlier this year. Control-group sales, which are used to calculate gross domestic product, increased 0.5%, above consensus expectations for a 0.4% gain, pointing to another strong quarter of economic growth.

  • Empire Manufacturing echoes strength. The Empire Manufacturing Index climbed to 25.6 in August, supporting a slew of economic data suggesting the manufacturing sector is at its strongest point of the economic cycle. Respondents to the New York Fed’s monthly manufacturing survey noted their six-month outlook was fairly optimistic and have increased their capital spending plans. However, respondents also noted lengthened delivery times, backing up supply-chain constraints highlighted in other manufacturing reports, and elevated prices. While manufacturing growth has been strong this year, the surge in prices and supply chain disruptions could curb further economic growth.

  • “Headline” inflation no cause for alarm. Last week’s inflation data showed that pricing pressures are at their strongest point of the economic cycle. To us, these reports are much less alarming than their headline readings suggest. On today’s LPL Research blog, we’ll highlight recent inflation data and explain why consumer and wholesale pricing growth reflects price stability, not runaway inflation.

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Wednesday

  • Retail Sales Advance MoM (Jul)
  • Industrial Production (Jul)
  • UK: CPI & PPI (Jul)
  • UK: Retail Price Index (Jul)

Thursday

Friday

 

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

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All performance referenced is historical and is no guarantee of future results.

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Index data obtained via FactSet

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