Big Data: Jobless Claims, Import/Exports, Retail Sales, Plus WMT Q3 & More

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Thursday, November 15, 2018

Some days there’s just not much to talk about ahead of the opening bell for regular trading; if there are big fluctuations in pre-market activity, often we must look overseas or to a particular company’s unique set of circumstances to help explain the move. Today is not that day – we have plenty of grist for the mill in both economic data and Q3 earnings reports from the Retail sector.

As we awake to another Thursday, so we see another Weekly Jobless Claims report. A total of 216K initial claims last week was 2000 higher than the previous week, but still within a range consistent with a very strong labor market. This is also roughly in-line with the 4-week average of new jobless claims.

Continuing Claims rose for the first time in over a month, by 46K to a total of 1.68 million on the week. This is also historically extremely low, though we will continue to keep an eye on these reads in the weeks and months to come.

Retail Sales spiked up 0.8% for October, although subtracting autos and gasoline purchases that figure subsides to 0.3%. As autos have apparently accounted for 10 basis points of this, it would stand to reason that higher prices at the pump last month accounted for a large segment of this higher Retail Sales headline. These would look to dwindle when this report comes out next month, as oil prices are wallowing at year-plus lows currently.

This is to suggest that inflation in the Retail segment isn’t necessarily pummeling the economy currently; indeed, the main reason economists strip out things like energy prices is to get a clearer read of inflationary pricing, as those prices carry volatility with them month to month. Department store pricing rose 1.3% last month, with Electronic Appliances up 0.7%. Going into holiday shopping season, it will be interesting to see where pricing begins to steepen.

Import Prices for October blossomed +0.5%, up from a downwardly revised 0.2% the previous month. Of this, again we see oil prices playing a major factor, because ex-petroleum this headline figure gets cut by more than half to 0.2%. Year over year, Import Prices are up 3.5%, which is indicative of higher inflation beginning to have an effect on the overall economy, but look for lower oil costs in November to tame this headline a month from now.

Exports also jumped, to +0.4% for last month, from an unrevised 0.0% reported in September. Offsetting our complacency about cheaper oil amending inflation fears is the possibility that we’re starting to see tariff results affecting these numbers. Just how far these tariffs go – whether or not an additional 25% tax is added to automobile imports, for example – will eventually have a profound effect on Imports and Exports in the coming months. Year over year, Exports are up 3.1%.

The Empire State headline for November beat expectations to 23.3, which is also above last month’s read of 21.1. Relative strength in New York State production is offset, however, by a miss in this morning’s report from the Philly Fed : 12.9, way down from the 20.0 expected and the 22 reported last month. Count these East Coast economic results mixed for now.

Going back to Retail a moment, Walmart WMT put out a somewhat mixed report for its fiscal Q3, topping earnings expectations by 6 cents to $1.08 per share on sales of $124.9 billion, which was basically in-line with the Zacks consensus. Shares are trading up 1.6% a half hour before the opening bell, more than half the retail giant’s market gains year to date. For more on WMT’s earnings, click here.

J. C. Penney JCP was also mixed in its earnings report this morning, posting a 52-cent loss per share which outperformed expectations by 5 cents, while disappointing on the top line by 2.8% to $2.73 billion for the quarter. Shares of the big-box retail stock, already having sheared off 61% year to date, has tumbled another 12% in early trading today. For more on JCP’s earnings, click here.

Battery giant Energizer Holdings ENR beat expectations in its fiscal Q4 on the bottom line by 2 cents to 83 cents per share, with $457.2 million in sales which was in-line with what analysts had been looking for. Earnings were way up from the 54 cents per share reported in the year-ago quarter. Shares are up 16.7% year to date, prior to this morning’s earnings release. For more on ENR’s earnings, click here.

Mark Vickery

Senior Editor

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