Stocks spent most of the morning in the red and most of the afternoon in the green.
First, the scoreboard:
- Dow: 15,451.0, +31.3, +0.2%
- S&P 500: 1,694.1, +4.6, +0.3%
- NASDAQ: 3,684.4, +14.4, +0.3%
And now, the top stories:
- Retail sales climbed by just 0.2% month-over-month in July. This was a bit lower than the 0.3% gain expected by economists. Excluding autos and gas, sales climbed 0.4%, which was right in line with expectations. “For real consumer spending, the detail imply about a 1.7% annual rate of growth through the first month of the quarter — about the same pace as in Q2,” said UBS’s Drew Matus. “That said, the pattern in retail control sales (0.1%, 0.2%, 0.5% in the past three months) suggests the possibility of acceleration as the quarter goes on.”
- In a somewhat unexpected move, activist investor Bill Ackman withdrew from the board of JC Penney. Ackman took a stake in the department store chain with the intention of turning around its sales. He recruited Ron Johnson, the retail guru behind the Apple stores, to take over as CEO. However, sales collapsed as Johnson rolled out his revamped sales strategy. Ackman and the board had been butting heads ever since.
- “We currently have a large position in Apple,” disclosed billionaire investor Carl Icahn on Twitter. “My opinion that a larger buyback should be done now.” The stock jumped on the announcement.
- In a new note to clients, ConvergEx Group chief market strategist Nick Colas discusses the falling correlations across asset classes. “Surprisingly, the last month of correlation data for a whole variety of asset classes and industry groups shows that perhaps the long wait for more normal capital markets is finally over,” wrote Colas. “We’ve been tracking this data since the financial crisis, waiting for this moment.”
- Deutsche Bank strategist David Bianco is bullish in the long-run, but he’s more cautious on the near-term. Among other things, he’s worried investors may be feeling a little too confident about the future. “We use the ratio of S&P 500 PE to quarterly average VIX as a gauge of market emotion,” wrote Bianco in a recent note to clients. “The ratio is currently 1.17 with S&P 500 trailing PE of 15.9 and QTD avg. VIX of 13.7. We are still in “realistic and disciplined” territory, but on the verge of reaching “complacency.””
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