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Retail Sales for July Beat Expectations

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In what is the busiest day for economic reports, this morning we see some new numbers that are helping keep pre-market futures notably in the red at this hour. The Dow is currently down -276 points, the S&P 500 is -29 and the Nasdaq -88 points. This follows the relatively strong trading day we saw yesterday, with all these indices finishing higher on the session.

Retail Sales for July nearly doubled expectations to +0.7% — the second-highest print of the past year (January’s +2.8%), and more than twice the upwardly revised +0.3% reported for June. Stripping out auto sales for the month, we see +1.0% — more than double the +0.4% analysts had anticipated. Further stripping out autos and gas also reached +1.0%, as did the Control read, which makes its way up the calculations in other economic metrics. These are all very strong month-over-month figures.

Import Prices, also for July, reached +0.4% — double consensus expectations. Taking out volatile petrol prices, we’re unchanged on the month, following -0.4% reported a month ago. Year-over-year, we see -4.4% for the number, an improvement from the previous month’s -6.1% — the lightest print we’ve seen since -1.1% in February of this year. It also marks the sixth-straight negative month for Import Prices; this continues to be an anti-inflationary metric. Exports, on the other hand, shot up to +0.7% last month, springing from an upwardly revised -0.7% from June — the highest read since December ’22.

After the opening bell today, Business Inventories for June are expected to come in unchanged following +0.2% reported the previous quarter. The North America Home Builders Confidence Index is anticipated to tick up in the month of August, to 57 from the previous 56. This would be the next incremental step up after the June print surprised markets with a 5-point jump month over month. It marked the apparent resurgence in the housing market, which is expected to continue.

Speaking of housing, home improvement giant Home Depot (HD - Free Report) easily surpassed expectations this morning in its Q2 report: earnings of $4.65 per share outpaced the Zacks consensus by 20 cents, while revenues in the quarter of $42.92 billion improved on the estimated $42.25 billion. Both top and bottom lines were still negative year over year, with negative comps at -2% overall improving over the expected -3.9%.

Guidance remained in-line with earlier estimates. Shares are down marginally on the news, but still up more than +4% over the past month, which sees the company recovering toward yearly highs after a trough this past spring.


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