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S&P 500 Climbs Along With U.S. Retail Sales, GBPUSD Rallies to 4-week High & JP Morgan Beats Earnings Expectations

S&P 500 higher as U.S. retail sales climb

The benchmark S&P 500 was trading higher on Friday, as data showed that retail sales in the United Sales had risen by more than expected.

Figures from the Commerce Department reported that sales grew by 0.7% last month, with August’s number also revised higher, showing an increase of 0.9%.

Markets had initially expected that sales would slip by 0.2% in September, however today’s numbers highlight that consumers have mainly ignored inflation worries.

💡 Why are retail sales an important economic indicator?
When consumers open their pocketbooks, the economy tends to hum along. Retail shelves empty and orders are placed for replacement merchandise. Plants make more widgets and order raw material for even more.

Gold was one of the day’s biggest movers, falling by as much as $34 in today’s session.

All major U.S. indices were trading higher on the news.

GBPUSD rallies to 4-week high

The rally in cable continued in today’s session, with GBPUSD climbing to its highest level since September 20th.

Friday’s move saw GBPUSD hit an intraday high of 1.3773, after successfully navigating past the short-term resistance level of 1.3736.

Moves in this pair come as many believe that the Bank of England could be set to increase interest rates, in order to combat rising consumer prices.

💡 Why is inflation an issue?
While Britain shares its supply chain problems, soaring energy prices and labour shortages with many countries around the world, investors have singled it out as a country especially prone to inflation and higher policy rates, with Brexit exacerbating the bottlenecks.

Nevertheless, officials have stated that there is little BoE can do against rising energy costs and supply chain bottlenecks

In addition to this, it is also expected that the Federal Reserve will begin tapering its COVID-19 rescue programme, despite last month’s non-farm payrolls disappointing.

Many have now forecasted that rates could be heading to as high as 1.3855 in the near term.

JP Morgan shares up, on Q3 earnings

Shares in J.P. Morgan were higher on the last day of the week, days after it was reported that the company had beaten earnings expectations.

Figures which came during the investment banks earnings call on Wednesday showed that, both revenue and earnings had surpassed forecasts.

Source: CNBC Television

The company’s earnings per share came in at $3.74 versus expectations of $3 per share.

JP Morgan’s third quarter revenue also rose, coming in at $30.44 billion versus estimates of $29.8 billion.

As of writing, $JPM was trading 1.61% higher.

“The most difficult thing is the decision to act, the rest is merely tenacity.”

– Amelia Earhart

Eliman Dambell

Senior Market Analyst