Retail sales data and Walmart ease US recession concerns
US retail sales grew strongly in July, and the numbers from America’s largest bricks-and-mortar retailer back that up: Walmart raised its sales and profits forecasts on Thursday as well.
Both suggest that the US consumer is not in recession mode. Arun Sundaram, an analyst at CFRA Research, said (according to Reuters):
The US consumer seems to be in a stable position relative to the start of this year, which is encouraging given concerns of a looming slowdown.
Walmart’s chief executive, Doug McMillon, told analysts that “so far, we aren’t experiencing a weaker consumer overall,” according to the Financial Times.
Retail sales and WalMart earnings/guidance better than expected, jobless claims lower ... whatever your recession probability was yesterday, you should lower it today.
— Greg Ip (@greg_ip) August 15, 2024
Ronald Temple, chief market strategist at Lazard, an investment bank, said:
Today’s retail sales data and jobless claims offer yet more evidence that recession risk remains low in the US even as the economy decelerates from unsustainably strong growth levels. The case for the Fed to ease by 25 basis points is rock solid, but there is little evidence to suggest a need for a 50 basis point reduction.
In other business and economics news today:
The UK economy grew by 0.6% in the second quarter, continuing relatively strong growth over the course of this year. That performance came despite election uncertainty hitting output in July.
Brian Niccol, the new chief executive of Starbucks, is in line for a sign-on pay package worth up to $113m (£88m), in one of the largest such executive deals in corporate history and which is four times larger than that of his predecessor.
Danish energy group Ørsted cut the value of investments after delays to wind projects in the US and elsewhere.
Texas officials have added NatWest Group to a growing list of financial firms considered to be taking part in a “boycott” of energy companies, in a move that could limit the UK bank’s business with the oil-rich US state.
Evoke, the owner of William Hill and 888 reported widening losses in the first half of 2024, in a “disappointing” update that led its new management team to admit that its turnaround plan for the gambling group was running behind schedule.
You can continue to follow the Guardian’s live coverage from around the world:
In our coverage of the Middle East crisis, the Gaza death toll passes 40,000 as ceasefire and hostage talks begin in Doha
In our coverage of the Russia-Ukraine war, Zelenskiy says Ukraine’s troops have full control of Sudzha in Kursk
In US politics, Kamala Harris is set for a joint rally with Joe Biden and the Vance-Walz vice-presidential debate is confirmed for 1 October
In UK politics, Labour ‘putting rail passengers first’, says minister as she blames Tories for prolonging strikes
Thank you for following today, and please do join Graeme Wearden tomorrow to take you through to the weekend. JJ
Wall Street and European stock market indices rise after strong US retail sales
Europe’s stock markets have regained all of the losses of the past fortnight, after the weaker-than-expected US non-farm payrolls caused days of turmoil.
US stock markets have now also opened higher, boosted by the strength of retail sales.
Here are the opening moves via Reuters:
The Dow Jones industrial average rose 287.3 points, or 0.72%, at the open to 40295.74.
The S&P 500 rose 45.9 points, or 0.84%, at the open to 5501.13.
The Nasdaq Composite rose 201.9 points, or 1.17%, to 17394.545.
