The U.S. Commerce Department revealed that retail spending for the month of May fell by 1.2 percent, pushing U.S. stock market futures lower, though they began to recover as the day moved forward. Traders feared that the weak retail data undercut hopes for economic recovery, since most experts agree that around 70 percent of economic growth is driven by consumer spending.
The data show that the decrease was not spread evenly across sectors – rather, it was driven by a nearly 10 percent plunge in spending on building materials and an almost 2 percent drop in new automotive purchases. Excluding those two categories and the purchase of fuel, spending rose ever so slightly, by 0.1 percent.
Stock futures have been buffeted in the past six months by contradictory signals and sentiments on the strength of the economic recovery. Some pieces of information, like new hiring numbers which include temporary government hires, have become sharply contested political footballs.
Employment is the other big story for stock market futures for that very reason. Over 400,000 jobs were added in May, but the vast majority are temporary positions related to the U.S. Census.
Predictably, crude oil futures also fell, while gold futures trended upwards slightly in early trading Friday morning.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
