Weekly Market Outlook
The US economy continued to reel off less-than-impressive data on Friday with retail sales, business inventories, inflation and consumer sentiment continuing to point to a slackening of economic growth during the third quarter. Retail spending rose 0.4% in July, a result that was slightly below economic forecasts for a rise 0.5%. However, once auto and fuel purchases were removed, the data was less impressive with “core” spending falling by 0.1%.
As you would expect from a subdued retail environment, inflation rose by a modest 0.3% in July, with a 2.6% rise in energy costs helping to snap a two-month decline in consumer prices. However, once energy costs were removed, prices rose by 0.1%, an outcome that suggests the threat of deflation is likely to persist in the months ahead.
The Dow Jones fell 0.2% on Friday to close at 10,303.15, while the S&P 500 lost 0.4% and the Nasdaq retreated a further 0.8% to end a negative week for the US market.
The next two weeks in Australia brings us the bulk of Australian corporate earnings reports. Click here for a brief rundown of annual results due out this week.