Stocks Backtrack Despite Strong Retail Sales

US trading is subdued this morning with index futures trading down 0.3%-0.5%. Even red-hot Broadcom, which soared another 11% yesterday, appears to be slowing down, dipping 0.5% in premarket trading. Over in Europe, the Dax is down 0.2%. The FTSE is down 0.8% on signs of stagflation as employment growth slowed and wage inflation accelerated. The Bank of England meets on Thursday.

Heading toward tomorrow’s big Fed decision, US retail sales beat street expectations (0.7% vs street 0.5%). US industrial production (street 0.3%) is due at 9:15 am EST. US flash PMI numbers were mixed yesterday. Manufacturing came in below expectations and below 50 in contraction territory. Services came in above expectations and above 50 in expansion territory.

Inflation pressures in Canada continue to ease. Consumer prices (1.9% vs street 2.0%) came in better than expected. The Canadian Dollar is down another 0.3% in the wake of soft inflation, the threat of US tariffs and two key cabinet resignations yesterday.

The US 10-year treasury note is strengthening today and pushing the US Dollar upward. Gold is down 0.4% today but Bitcoin is up 1.2%. On this and soft China data released earlier in the week, commodities are having a tough day with US Crude Oil down 1.1%, Natural Gas down 1.0% and Copper down 1.1%.

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