Stocks Retreat Despite Encouraging Retail Sales Report

U.S. has just released Retail Sales report for August. The report indicated that Retail Sales grew by 0.7% month-over-month in August compared to analyst consensus which called for a decline of 0.8%.

While the Retail Sales report exceeded analyst estimates, it should be noted that the previous report for July was revised from -1.1% to -1.8%, which partially explains the big difference between August’s actual Retail Sales and analyst estimates.

Continuing Jobless Claims Declined To 2.67 Million
U.S. has also released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 332,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 330,000. Continuing Jobless Claims decreased from 2.85 million (revised from 2.78 million) to 2.67 million compared to analyst consensus of 2.78 million.

S&P 500 futures remained under pressure in premarket trading despite encouraging data on Retail Sales and Continuing Jobless Claims. It looks that traders continue to take some profits off the table while S&P 500 remains not far away from historic highs. In this environment, the market will need additional upside catalysts to get back to all-time high levels.

WTI Oil Pulls Back After Rally
WTI oil has recently made an attempt to settle above the resistance level at $72.50 but failed to develop sufficient upside momentum and pulled back.

Yesterday, EIA released its Weekly Petroleum Status Report which indicated that crude inventories decreased by 6.4 million barrels compared to analyst consensus which called for a decline of 3.5 million barrels. U.S. domestic oil production increased from 10 million barrels per day (bpd) to 10.1 million bpd, which was also bullish for the oil market as oil production remained well below pre-hurricane levels.

However, it looks that some traders were ready to take profits after the upside move which took WTI oil from $67.50 to $73, so oil found itself under pressure.

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