Heading toward this afternoon’s Quadruple Witching Hour of futures and options expiries, US index futures are trading down 0.3% to 0.5%, with NASDAQ futures the weakest, adding to yesterday’s US index losses of up to 0.3%. European trading finds the Dax down 0.7% and the FTSE down 0.5%. Energy and metals are under pressure as well with Crude Oil down 0.1%, Natural Gas down 1.4%, Gold down 0.1% and Copper down 0.8%.
Concerns about the outlook for the global economy continues to weigh on sentiment. Have you seen the Atlanta Fed GDPNow forecast showing estimates for Q1 growth dropping of a cliff lately? Last night Nike announced it expects to see current quarter sales declines in the “low end of the mid teens”. In other words, a 12%-15% sales retreat, plus a drop in margins as it clears out excess inventory. Double ouch. Nike shares are down 7.3% in premarket trading on this weak outlook.
Earlier this month, several airlines put out profit warnings, suggesting that demand in the transportation sector was slowing. FedEx earnings confirmed this last night, falling short of expectations and sending FedEx shares down 9.0% in premarket trading.
Today’s Canada retail sales reports highlights the economic turmoil being brought on by the tariff wars. Headline retail sales fell 0.6% from last month, which was worse than the 0.4% decline the street had expected. Retail sales excluding autos rosed 0.2% which was better than the 0.2% decline analysts had been expecting. Combined, these numbers suggest that the auto sector had a terrible month which could be due to consumer uncertainty creating a reluctance to spend on high ticket items like cars. Don’t forget Canada housing starts came in well below expectations earlier this week.