The end of the week seems to bring a wave of deterioration of moods on financial markets. Perhaps the reason for this is the publication of macroeconomic data from the world's largest economy, which pointed to its slower growth.
Industrial production in the United States fell by 0.1 percent from the previous month in December 2021, after rising 0.7 percent in November and compared with market expectations for a 0.3 percent increase. Production of motor vehicles and parts fell 1.3 percent. Excluding the automotive sector, factory output fell 0.2 percent. U.S. retail sales, on the other hand, fell 1.9 percent in December, the largest decline since February 2021 and ending an earlier 4 consecutive months of strong sales growth amid rising coronavirus infections, rising prices and the fact that much of the holiday shopping was postponed to earlier in the month amid expectations of delivery delays. The data is in line with market and consensus forecasts.
Furniture (-5.5 percent), sporting goods (-4.3 percent), apparel (-3.1 percent), electronics (-2.9 percent) and general merchandise (-1.5 percent) stores posted the largest declines. Sales also declined at food service outlets (-0.8 percent), gas stations (-0.7 percent), food and beverage stores (-0.5 percent), and auto dealers (-0.4 percent). On a year-over-year basis, however, retail sales rose 16.9 percent, which may be due to the highest U.S. inflation in 40 years.
With weaker data out of the U.S. for manufacturing and for sales, and with the Fed in turn trying on interest rate hikes, stock market investors may be taking this as a sign of even more trouble for the economy. The Dow Jones index fell about 0.95 percent, to 35760 points, the S&P 500 seems to be down more than 0.5 percent, to 4633 points, and the Nasdaq 100 seems to be down only 0.15 percent, to 15475 points, after 3:30 p.m.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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