US shoppers keep spending
|Markets have been in no rush to end the shortened week on a strong note, although the Dow has managed to clock up a small gain while the S&P 500 battles to hold 2900. Healthcare stocks have led the way lower, while in an ironic twist tobacco is also under pressure thanks to Mitch McConnell’s bid to raise the purchase age of tobacco to 21. At least US retail sales have continued to grow, rising 1.6%, comfortably ahead of forecasts. This followed on from the UK’s number this morning, which was also stronger than expected – consumers are finally getting pay rises ahead of inflation, and it is showing up in the figures, though this is little comfort to bricks-and-mortar chains that remain
unable to ward off the effects of online shopping. While eurozone PMIs have not been as bad as feared, the euro has still dropped sharply, as traders weighed the prospect of looser monetary policy as the ECB looks to kickstart euro-area growth.
The Mueller report promises to bring the collusion and obstruction narrative squarely back into the public consciousness, prompting fears of fresh political instability in the US. But impeachment still looks like a very distant prospect, with the Democrats still to find a worthy opponent for next year’s contest, or even to begin identifying one. Next week’s GDP figure will be another test of how well the economy is doing, but with retail sales on the up it is clear most Americans are content with the current state of affairs, at least where the economy is concerned.
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