Retail Sales Double Estimates in February, Futures Pop
Retail Sales data for February was released Wednesday pre-market to the delight of traders. Retail sales in the U.S. for the previous month trumped estimates sending stock futures higher and showing that the U.S. consumer remained strong in February despite higher taxes in the first two months of the year eroding disposable incomes.
For February, the Census Bureau reported that core retail sales rose 0.4 percent from the previous month, doubling estimates of a rise of 0.2 percent. Retail sales ex-autos, a good measure of the health of the consumer due to the volatility of auto sales, rose 1.0 percent in the month on expectations of a 0.5 percent gain. Lastly, retail sales ex-autos and gas, mitigating the effects of rising gas prices, rose 0.4 percent on estimates of a gain of 0.2 percent.
In the press release, the Census Bureau noted that auto sales remained strong in February and building equipment and garden supplies sales were strong as the northeast dealt with heavy snow storms. Gasoline sales also rose five percent from January as gas prices rose.
Sales of furniture were weak in the report with furniture sales declining 1.6 percent in February from January. Sporting goods sales also were weak in the report, declining 0.9 percent from January. Lastly, food services and drinking places saw a decline in sales of 0.7 percent in February.
U.S. stock futures bounced off of their early morning lows following the report. S&P 500 futures set to expire in June rose from a low of 1,542.90 to 1,547.90 and are now slightly higher on the session. Dow Jones Industrial Average futures also rallied off of lows and trade just shy of flat on the session while NASDAQ 100 futures bounced back into positive territory.
The dollar was also stronger on the release as the Dollar Index rose approximately 0.2 percent following the release to 82.76. The dollar was notably stronger against the euro, the Swiss franc and the Canadian dollar and erased some losses against the pound and the yen.
Oil prices were also stronger and rose with gasoline prices as auto sales and gasoline sales were strong in the report. WTI Crude futures expiring in April rose 0.4 percent to $92.94 per barrel as the crack spread also narrowed. Gasoline futures also for April expiration rose 0.3 percent to $315.99 per gallon.
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