Despite fears of major falls after a torrid Thursday, US markets showed resilience on Friday morning. The Dow Jones and the S&P 500 were slightly down after markets opened (0.20% and 0.22% respectively) while the Nasdaq was fractionally up.
It has been a turbulent week in the US. Concerns remain over the Trump administration’s ability to weather one storm after another - sabre-rattling with North Korea, Charlottesville unrest and subsequently the much-rumoured resignation of Gary Cohn director of the National Economic Council, have undoubtedly caused jitters in the market.
The terrorist attack in Barcelona which sent European markets lower on Friday, was also a factor that could impact US markets negatively.
But financial market reaction to terror attacks these days tend to be short lived – the FTSE 100 fell only 0.3% following the Borough Market attack in London in June. After falls in early trading, US markets recovered any losses.
White House changes
As for fears of policy paralysis in Washington, Wall Street was encouraged by confirmation – for the time at least – that Cohn, who is viewed as the leader of US tax reforms, is staying put. Cohn’s continued presence is important and market moves showed this.
Subsequent reports in The New York Times that President Trump had decided to push out chief strategist Steve Bannon – the man who spoke about ‘economic war with China’ - bumped up the Dow and the S&P with the Vix index dropping.
The dollar also rose following the announcement of Bannon’s departure. Oil surged, though not necessarily a reaction to the news from the White House.
Most markets had fallen back a little at close after the initial Bannon-inspired boost.
· Dow Jones 21675.33 -0.35%
· S&P 500 2425.52 -0.18%
· Nasdaq 6216.53 -0.09%
· Russell 2000 1359.57 +0.04%
· NYSE Composite 11718.13 +0.04%
· Gold 1292.2 -0.1
· Oil WTI $48.61 +1.54%
· 10-Year Treasury Yield 2.19% -0.06%
Mixed bag from retail brands
US retailers have been in the spotlight this week. Target and Walmart posted solid earnings results this quarter. Target showed store sales growth thanks to its store remodeling programme , while Walmart saw its digital sales surge 60% year-on-year.
However, it was not all good news for US retailers, with many reporting weaker sales. The brand taking the biggest hammering today was athletic shoe retailer Foot Locker.
The company missed its sales target by 5% and lost a quarter of its market cap. The company’s earnings are down 34% year-on-year and the stock plummeted 26% on these poor numbers. The weak performance has been put down to e-commerce taking a chunk out of Foot Locker’s business.
Agricultural machinery giant John Deere saw its share price weaken as it revealed it had missed its core sales forecast. Sales in the US and Canada, which is the firm’s biggest market, disappointed.