Wall Street Drops on Poor Retail Sales

While the world has been captivated by the awful scenes coming out of Afghanistan, the financial markets continue to roll on. The S&P 500 is down today after a surprisingly poor retail sales report.

Wall Street had been expecting a decline of 0.3%. Instead, it was a decline of 1.1%. It appears that the Delta variant is having an impact on consumer behavior.

Though July saw a month-over-month decline, the $617.7 billion in sales still represented a 15.8% acceleration from the same time a year ago.

Most of the monthly decline came from motor vehicles and parts dealers, which fell 3.9%. The auto sector has been a major contributor to the inflation surge in 2021, with used car prices jumping higher amid swelling demand.

Clothing stores saw a 2.6% decline, and sporting goods, musical instrument and book stores fell 1.9%. Online sales also posted a 3.1% drop.

With energy prices continuing to rise, gasoline sales increased 2.4%, and the return of businesses to bars and restaurants pushed food and beverage sales up 1.7%. Eating and drinking establishments saw a 38.4% increase in sales from a year ago.

The retail sales report is important because it tells us how shoppers are behaving. Consumer spending makes up about 70% of the economy.

We’ll learn more about consumer behavior on Thursday when Ross Stores (ROST) releases its earnings. Their last earnings report beat expectations by 52%. Wall Street expects earnings of 94 cents per share.

Posted by on August 17th, 2021 at 11:59 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.