US stocks are holding steadier and the market’s scary roller-coaster ride from recent weeks is slowing. The calm trading may be short-lived, though, with a decision by the Federal Reserve on interest rates coming later in the week and worries continuing about President Donald Trump’s trade war.
The S&P 500 was 0.1 per cent higher in afternoon trading, coming off its fourth straight losing week. The Dow Jones was up 198 points, or 0.5 per cent and the Nasdaq composite was 0.4 per cent lower. The Australian sharemarket is set to rise, with futures at 4.57am AEDT pointing to a gain of 50 points, or 0.6 per cent, at the open. The ASX added 0.8 per cent on Monday.
Wall Street has made a steady start to the week.Credit: Reuters
Stocks have been tumbling recently on worries that Trump’s announcements on tariffs and other policies are creating so much uncertainty that they’ll push US households and businesses to freeze their spending, which would hurt the economy. Surveys have shown sharp drops in confidence, and some companies are already warning about changes in behaviour from their customers.
A report on Monday said US retailers broadly saw weaker revenue last month than economists expected, but it may not have been quite as bad as it seemed on the surface.
Much of the shortfall in growth versus expectations was due to weaker-than-forecast sales of automobiles and lower fuel costs. Outside of them, the performance was closer to expectations.
Treasury yields initially rose immediately following the report’s release. That’s often an indication of firming confidence among bond investors about the strength of the US economy. But yields quickly yo-yoed afterward.
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“In our view, this morning’s February retail sales report offers evidence of a limited, modest economic slowdown, rather than signalling a gathering recession,” said Jennifer Timmerman, investment strategy analyst at Wells Fargo Investment Institute.
It’s a sharp turnaround for investors to talk about a possible recession after the US economy closed last year running at a solid rate. Excitement at the time was also building about policies coming from Trump to accelerate growth. To be sure, hiring still remains relatively healthy, and that could help keep the economy growing. But the talk about recession by itself could sap confidence.
