Retail sales rose solidly in July, easing recession fears along with jobless claims and other up-to-date economic reports early Thursday. The S&P 500 rose solidly near the open.
Meanwhile, Walmart earnings topped views with the Dow Jones retail giant offering an upbeat assessment about its outlook and consumer spending.
Retail Sales
Retail sales jumped 1% vs. the prior month, up from June's downwardly revised 0.2% decline and vs. views for a 0.3% increase. Sales excluding autos and gasoline rose 0.4% after June's 0.8% jump. Economists expected 0.3%.
Jobless Claims
Initial jobless claims for the week ended Aug. 10 fell to 227,000 from the prior week's 234,000 and forecasts for 234,000. Continuing claims as of the week ended Aug. 3 dipped to 1.864 million vs. a downwardly revised 1.871 million in the prior week.
Regional Manufacturing Reports
The Philadelphia Fed manufacturing index was -7 in August vs. July's 13.9. Readings above zero indicate growth. The consensus estimate was 5.8.
The New York Fed's Empire State Manufacturing index for August was -4.7 vs. July's -6.6. Economists forecast -6.
Industrial Production
The July industrial production report fell 0.6% vs. forecasts of a 0.1% dip after June's downwardly revised 0.3% gain. Manufacturing fell 0.3%, in line with views but with June revised down to unchanged.
Housing Market Index
The NAHB Housing Market Index for August fell to 39, below forecasts for an unchanged 42. Readings below 50 signal weak builder sentiment.
S&P 500 Jumps
The S&P 500 rose 1.6% on Thursday, clearly above its 50-day line.
Walmart stock jumped to a new high, rebounding bullishly off its 50-day line.
On Wednesday, the S&P 500 rose 0.4%, closing above the 50-day moving average by a whisker. On Tuesday, the major indexes staged a follow-through day, confirming the new stock market rally.
The 10-year Treasury yield popped 10 basis points to 3.92%.
Overall Economic Picture
The surprisingly weak July jobs report, released Aug. 2, capped a string of disappointing economic reports, raising concerns that the U.S. economy could be stalling or possibly heading toward a recession.
But a solid ISM services index and lower jobless claims in the week ended Aug. 3 suggested that the July jobs report reflected weather-related impacts.
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Fed Rate Cut Odds
Markets are expecting a Fed rate cut at the September policy meeting. The odds have largely shifted back to a quarter-point cut, with only a 27.5% chance of a 50-basis-point cut. That's down from 37.5% heading heading into Thursday's retail sales report and above 50% earlier this week.
If the economic growth seems modest but stable, policymakers may see little need to ease aggressively.
Fed chief Jerome Powell is expected to give a policy address at the annual Jackson Hole monetary policy symposium late next week.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
