Wall Street opened higher on Thursday amid good news from the retail sector.
US stock index futures rose as retail sales data for July paints a less dire picture of the retail industry. These factors have helped ease fears of a coming recession, though mixed reports and volatile news from the trade war have kept investors concerned.
After the Dow index reported its worst day so far this year, a jump in shares was seen Thursday morning. The US Commerce Department reported that retail sales were up 0.7% in July, beating previous estimates of a 0.3% rise. According to Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, “The July number shows that the weakest economic data that people keep pointing out to for a global slowdown is coming from outside the U.S.” While futures rose Thursday morning, they were initially down on news from China’s finance ministry, which said it will take countermeasures against the latest round of tariffs on $300 billion worth of Chinese goods. This conflicts with a later statement by a Chinese foreign ministry spokeswoman who said, “We hope the U.S. will meet China halfway, and implement the consensus of the two heads of the two countries in Osaka.”
Recession fears have gripped the markets, primarily due to the unpredictability of the trade war and the US Treasury yield curve inverting for the first time in a dozen years. Trade concerns have been annoying the markets for about a year now, but traders have been betting on three Federal Reserve interest rate cuts this year. The next rate cut is expected in September as the Fed attempts to sustain the 10-year bull market run on Wall Street.