US stocks fell on Wednesday as investors digested hotter-than-expected retail sales and a slowdown in output growth in the world’s largest economy.
Wall Street’s benchmark S&P 500 fell 0.5 percent and the tech-heavy Nasdaq Composite lost 1.2 percent. The dollar index, which tracks the currency against six of its peers, fell 0.1 percent and is down 4.7 percent so far in November.
Data released on Wednesday showed that US retail sales rose a better-than-expected 1.3 percent in October, after stabilizing in September. Economists polled by Reuters had forecast a 1 percent increase.
The sales figures came after department store Target warned of a slowdown in consumer demand and announced a multibillion-dollar cost-cutting plan that caused its shares to fall more than 12 percent.
“Dwindling savings and increasing use of credit are keeping consumers on their toes right now,” said Shelby McFaddin, an analyst at Motley Fool Asset Management. Total household debt rose 2.2 percent to $16.5 trillion in the third quarter, data from the Federal Reserve Bank of New York showed.
Another series of data released on Wednesday showed that US manufacturing output rose 0.1 percent in October, slightly less than the 0.2 percent increase economists had predicted. US industrial production, which includes output from mining and utilities in addition to manufacturing output, fell 0.1 percent. Economists had forecast an increase of 0.2 percent.
The numbers suggest US manufacturing is “slowly succumbing to global malaise,” said Paul Ashworth, chief North American economist at Capital Economics.
On the government bond markets, the yield on the particularly interest-sensitive two-year Treasury bills rose by 0.01 percentage points to 4.37 percent. The yield on the benchmark 10-year US bill fell 0.07 percentage point to 3.72 percent. Yields fall when prices rise.
US stocks rose in the previous session, consolidating strong gains late last week after a report on Tuesday showed that factory gate prices rose 0.2 percent in October from September, less than the 0.4 percent rise reported by expected by economists polled by Bloomberg.
Across the Atlantic, the regional Stoxx Europe 600 fell 1 percent. London’s FTSE slipped 0.3 percent after new data showed that UK inflation accelerated to 11.1 percent last month from 10.1 percent in September. Core inflation, which excludes volatile food and energy prices, held steady at 6.5 percent in October, the same rate as in September.
“It looks like headline inflation in the UK has peaked,” said James Smith, economist at ING.
“The fact that the government is effectively repairing electricity [and] Gas unit prices below wholesale costs through next April means this is probably as high as it gets, although admittedly we expect overall prices to remain in double digits through at least February next year,” Smith added.
Asian stocks fell on Wednesday after posting sharp gains earlier this week as geopolitical tensions in Europe and rising Covid-19 cases in China hit markets.
Hong Kong’s Hang Seng Index fell 0.5 percent, China’s CSI 300 fell 0.8 percent and South Korea’s Kospi fell 0.1 percent. Japan’s Topix has hardly changed.
https://www.ft.com/content/043827ef-c54b-412c-8b56-b4b3f931edab US stocks slide as retail sales numbers beat forecasts