For months, the conventional wisdom on the U.S. economy has been that, while there are numerous headwinds and headline risks to both the market and the underlying health of the economy, there has been an unwavering bright spot in the consumer. Earnings from the biggest banks on Wall Street appeared to only strengthen that belief, with every bank with a major U.S. retail arm ー from Chase to Citi to Wells Fargo ー noting strength in consumer spending.
That theory is now being put to the test. Retail sales for September came out Wednesday morning, showing the first decline in seven months. Overall sales fell 0.3 percent in September compared to estimates that called for a 0.3 percent increase, according to analysts polled by both Bloomberg and Reuters. It was the first decline since February of this year.
Jonathan Corpina, a senior managing partner at Meridian Equity Partners who trades on the floor of the NYSE, told Cheddar that the retail numbers point to a "double edge" in the economy. "Economically, our policies have gotten better," he said. "But there's still so much uncertainty."
"It's hard for individuals and companies to really make large, long-term investments at this point," Corpina said. Between Brexit, tariffs, trade, Fed policy, and presidential tweets, there is deep ambiguity that is giving investors pause, and Corpina said it's unlikely that's going to change before next year's election.
"The market continues to take two steps forward, one step back," he said.
Still, retail sales are just a "piece of the puzzle" that should be taken in context, especially with the indications from the the big banks that clients are still spending, and they are still lending. Consumer spending makes up more than two-thirds of the U.S. economy and has been growing at a brisk quarterly clip. Now the question is whether third-quarter data will show that a slowdown is spreading from the manufacturing sector to the consumer.
Upward revisions from the Commerce Department for August also helped soften the blow of the September surprise. Spending was particularly weak in auto dealerships, which saw a 0.9 percent drop, the largest since January. When excluding auto sales, gasoline, retail sales were essentially flat.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
