By James Langton
(May 11 – 09:00 ET) – Stock traders got some good news this morning. U.S. retail sales for April were reported down 0.2%. Excluding food and auto they were unchanged. The headline number is well below expectations of a 0.5% gain, and marked the first decline since the fall of 1998. Jobless claims slipped just 7,000 last week.
These numbers indicate either a pause in the raging economy while people pay their big tax bills, or a fundamental slowing. Which ever way, traders love the number. They are hoping that it will convince the U.S. Federal Reserve Board to raise rates just 25 basis points instead of the predicted 50 bps at its meeting next week. Tomorrow’s Producer Price Index will now be watched closer than ever.
In Canada, the Bank of Canada’s semi-annual monetary policy report, that was promised yesterday, is actually coming out later today.
This morning Sun Life announced a 5% share buyback.
In Europe, stocks are mixed once again, with telecoms sliding and retailers up. London’s FTSE has added 57 points to 6157. The French CAC 40 is down 19 ticks to 6244. Germany’s DAX has dropped 70 points to 7051.
This came after the European Central Bank left rates unchanged, although analysts are expecting hikes soon.
One stock taking a beating in Europe is Applied Materials. It missed its numbers yesterday. The hit on the world’s biggest semiconductor-equipment maker comes on the heels of market giant Cisco getting slammed by traders. And Intel reporting that it may face a massive recall.
In Asia, trading was dull overnight. The Nikkei dropped a mere five points to 16882. Markets in Hong Kong were closed for a holiday.