News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • And the DAX isn't the only pressing signal from key markets. The Dow for example which spends most of its time in net short territory has flipped net long with the largest long exposure I can see in at least two years - even greater than the Pandemic lows https://www.dailyfx.com/sentiment?ref-author=Kicklighter&CHID=9&QPID=917719
  • EUR/JPY IG Client Sentiment: Our data shows traders are now net-long EUR/JPY for the first time since Oct 19, 2020 13:00 GMT when EUR/JPY traded near 124.10. A contrarian view of crowd sentiment points to EUR/JPY weakness. https://www.dailyfx.com/sentiment https://t.co/iZ1yea7WEf
  • Brent crude down4% @$39.50/bbl...important multi-month support being tested #oott #oil @DailyFXTeam https://t.co/uBxTHNh9mv
  • Taking a look at retail traders' positioning in the $DAX (in CFDs at IG), we find the extraordinary fade effort continuing. Wonder if this is more of a 'buy the dip' mentality or expectations for 'mean revision'? Display the same but ultimately very different https://t.co/J4zln8hIu1
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Gold: -1.66% Silver: -4.54% Oil - US Crude: -5.63% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ySx61sKuGe
  • Heads Up:🇺🇸 EIA Cushing Crude Oil Stocks Change (23/OCT) due at 14:30 GMT (15min) Previous: 0.975M https://www.dailyfx.com/economic-calendar#2020-10-28
  • Heads Up:🇺🇸 EIA Distillate Stocks Change (23/OCT) due at 14:30 GMT (15min) Expected: -2.065M Previous: -3.832M https://www.dailyfx.com/economic-calendar#2020-10-28
  • The German $DAX is diving fast. The three-day slide from this European benchmark is flashing its biggest drop since March 18. Crossed the threshold of the 61.8% Fib of the Pandemic tumble: https://t.co/tOll3ZybDm
  • 🇨🇦 BoC Interest Rate Decision Actual: 0.25% Expected: 0.25% Previous: 0.25% https://www.dailyfx.com/economic-calendar#2020-10-28
  • Brexit talks have made progress with deal possible by early November $GBP
S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

2019-05-21 21:35:00
Peter Hanks, Analyst
Share:

S&P 500 Outlook Talking Points:

S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

Tuesday trading saw the S&P 500 close comfortably higher after the United States Commerce Department offered a licensing extension to Huawei. Elsewhere, a mixed bag of earnings from Home Depot, JC Penny, Kohl’s and Nordstrom offered their own influence on the Index. While share performances from the companies were mixed, weakness was widespread and a familiar theme rang true throughout.

Home Depot

Shares of Home Depot (HD) traded higher in Tuesday’s session – despite a tough quarter by many metrics. The company blamed poor weather conditions, labor shortages and weak lumber prices for their in-store sales miss which increased just 2.5% compared to analyst expectations of 4.2%. Alongside weather, labor and lumber, the company warned of the potential impact from the US-China trade war.

View A Brief History of Trade Wars for background on economic conflicts like the US-China Trade War.

Edward Decker, executive vice president of merchandising for Home Depot sad the latest round of tariffs on Chinese goods would raise the annual cost of goods sold by about $1 billion. “We haven’t worked through what we will do if the cost increase comes to us. Sometimes when we have cost increases, we pass it through in retail prices, sometimes we don’t” he said on a conference call. Home Depot said it already saw a $1 billion impact from US tariffs in 2018. Despite the possible $2 billion hurdle, Mr. Decker said the total was manageable.

Home Depot (HD) Price Chart: Daily Time Frame (September 2018 – May 2019 ) (Chart 1)

Home Depot HD price chart

JC Penny

JC Penny (JCP) traded near its all-time low of $0.94 a share on Tuesday after warning of a “meaningful impact” on its private and national brands from the next round of tariffs on China. JCP CEO Jill Soltau said the tariffs that were already in effect have had a minimal impact on business, but the company would continue to work on “de-risking efforts” with suppliers.

JC Penny (JCP) Price Chart: Daily Time Frame (September 2017 - May 2019) (Chart 2)

S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

Kohl’s

Kohl’s (KSS) suffered a similar fate in Tuesday trading but offered no commentary on the US-China trade war. Same-store sales fell -3.4%, compared to analyst expectations of just -0.2%. In turn, the retailer slashed guidance. On the back of this news, KSS shares slid to their lowest since January 2018 and suffered their largest lower gap since January 27 at -12.15%.

Kohl’s (KSS) Price Chart: Daily Time Frame (December 2017 – May 2019) (Chart 3)

S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

Nordstrom

Finally, Nordstrom (JWN) weighed in with its own disappointing results. Consequently, the company cut guidance and JWN shares traded to their lowest since September 2010 in response. The company did not, however, blame or comment on the US-China trade war. Instead, JWN executives pointed to “softer trends and executional issues” for the quarterly underperformance.

Nordstrom (JWN) Price Chart: Weekly Time Frame (January 2009 – May 2019) (Chart 4)

S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

Retail Sector Falters on Widespread Weakness

Following the sector-wide miss, the XRT retail-tracking ETF traded at its lowest ratio to the S&P 500 since June 2009. While each company offered silver linings in their respective reports, the industry has been slow to adapt to Amazon’s disruption and the US-China trade war is yet another headwind for an already struggling space.

XRT ETF Price Chart: Weekly Time Frame (January 2008 – May 2019) (Chart 5)

S&P 500 Outlook: Retail Sector Slides Amid a Series of Missed Earnings

Ratio of XRT ETF to SPX overlaid in red

For the S&P 500, retail weakness was overshadowed by tech and semiconductor strength amid the Huawei licensing extension. Now the Index must negotiate Wednesday’s release of Fed minutes from the FOMC meeting earlier this month. From a technical perspective, the Index rests narrowly beneath the 38.2% Fibonacci retracement from March’s lows to May’s high. Ahead of the Fed minutes, follow @PeterHanksFX on Twitter for equity insight.

S&P 500 Price Chart: 1 – Hour Time Frame (May 2019) (Chart 6)

S&P 500 price chart

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more: TSLA, Uber Stock Troubles Could Signal Shifting Tech Sentiment

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES