Markets in the US (aka global island of prosperity) continue to jump around as the Dow began the day lower then went positive before breaking our hearts with a light volume selloff of 185 points to 17,535. For the week the Dow lost about 1% in value and now sits about 5% below all-time highs. The rally has stalled due to weak US earnings and global economic pressures in China and Europe.
Nordstrom’s reported weak sales and earnings sending shares to lows not seen since 2011. Revenue declined by 1% and net income fell by 45%. Ouch! An interesting detail within the numbers was the divergence between sales growth at the Rack Stores vs sales declines at the traditional high end stores suggesting people are hunting for deals more often these days. The report also confirms weakness seen in other department stores like Dillard’s and Macy’s.
Despite the tough sales figures from department stores, the US Commerce Department reported retail sales for April and they came in well above estimates gaining 1.3%. This offsets the 0.3% decline seen in March. Areas of strength within the report were internet sales up 2.1%, auto sales up 3.2%. Core retails numbers showed a 0.8% gain which was much better than the 0.2% gain expected by the gurus.
Gold was flat and finished the week up $2.90 an ounce at $1,274. Oil prices were lower with WTI crude down a point at $46.25. For the week oil was up about 3% as the tug-o-war between high stockpiles and production problems in Canada and Nigeria played out on a stage of slowly growing global demand.