U.S. Retail sales hit a new record.
After being forecasted to come in at 8%, retail sales growth in the U.S. came in at 17.7% in May.
The number which includes food sales, is an all-time record and easily topped the previous record 6.7% from October 2001, which was a month after the 9/11 terrorist attacks.
Today’s data continues to highlight the strong recovery in the U.S. in the month of May, after a historic NFP number 2 weeks ago.
The number was released an hour before markets opened, and led the Dow to gain more than 900 points before settling somewhat during trading. All major U.S. indices were up close to 2%.
Beijing warns that new wave is “extremely serious”
Yesterday’s rumbles of a potential second wave of COVID-19 infections have grown today, as Beijing warns that the threat is “extremely serious”.
As a result of this new spike in infections, the chinese government has reimposed travel restrictions from the capital.
The decision to impose fresh travel curbs and raise the city’s emergency response level back to 2 from 3, came as Beijing’s current outbreak rose to 106 infections since late last week, this has been the highest number of new cases since February.
Today’s news from China has somewhat suppressed the gains in U.S. stocks which might have been higher, considering the record retail sales data.
Fed Powell remains “cautious” on instant recovery
Today Jerome Powell stated that there will not be a complete recovery in the U.S. until the Coronavirus has been completely controlled.
In a virtual hearing in front of lawmakers Powell stated, “While recent signs of improvement including a surprise gain in employment and a record rise in retail sales last month are encouraging, the damage inflicted by forced shutdowns of activity to contain the spread of the virus starting in March has left a very deep hole to fill, especially on the employment front.”
Against this backdrop the Fed continues to do its part, announcing a corporate bond buying program yesterday, as well as its long-awaited Main Street lending program, which will offer up to $600 billion in loans to U.S. businesses with up to 15,000 employees.
“It’s not whether you’re right or wrong that’s important, it’s how much money you make when you’re right and how much you lose when you’re wrong”George Soros
Nasdaq: The positive data from the U.S helped the tech heavy index rally on Tuesday, after recent falls. The Nasdaq now is within touching distance of once again setting new highs.
GBPUSD: Cable continued to fall on Tuesday, after being held at the 1.267 resistance level. The downward cross of the 10 / 25 day moving averages may also suggest more downside momentum.