Target sets upbeat holiday sales tone with raised forecast, shares surge By Reuters


© Reuters. FILE PHOTO: Shopping carts are seen at a Target store in Azusa

By Nivedita Balu and Aishwarya Venugopal

(Reuters) – Target Corp (N:) signaled a strong start to the holiday season and raised its full-year earnings forecast on Wednesday, betting on its aggressive push into faster delivery and investments in store revamps, sending its shares up 13%.

The company also reported better-than-expected quarterly results on the back of strong demand for its apparel, in contrast with other retailers, which have cut their forecasts, triggering fears of weaker consumer spending.

Target has spent billions of dollars on building its private label business and opening smaller stores in college towns and urban areas to lure customers, helping it gain an edge over its rivals.

“Apparel saw the most dramatic share gains in the quarter,” Chief Executive Officer Brian Cornell said. Comparable sales from the business jumped 10%.

Target’s focus on same-day delivery services such as drive-up, click-and-collect and Shipt as well as a new loyalty program is expected to help the retailer win more customers during the Thanksgiving and Christmas shopping period.

The holiday season is crucial for retailers as it can account for as much as 40% of annual sales. The season has six fewer days this year, prompting retailers to be more aggressive with deals and deliveries.

“We’re very excited about the opportunity this holiday season with the growth we’ve seen and the growth that’s in front of us from a same-day perspective,” Chief Operating Officer John Mulligan told analysts on a post-earnings call.

Target’s investments in its same-day delivery services accounted for 80% of its digital comparable sales growth, which surged 31% in the third quarter. Its store traffic was up 3.1%.

Overall same-store sales rose by a better-than-expected 4.5% and the company earned $1.36 per share on an adjusted-basis in the quarter ended Nov. 2.

Target said it now expects full-year adjusted profit of $6.25 to $6.45 per share, up from its prior range of $5.90 to $6.20 per share.

“Target continues to operate in rarified air, with Q3 results outstanding across the board,” Moody’s retail analyst Charlie O’Shea said.

Target shares, which have gained nearly 70% this year, rose as much as 14% to a record high of $126.06.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. retail sales rebound, but big-ticket purchases drop By Reuters



WASHINGTON, (Reuters) – U.S. retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season.

The Commerce Department said on Friday retail sales increased 0.3% last month, lifted by motor vehicle purchases and higher gasoline prices, reversing September’s unrevised 0.3% drop, which was the first decline in seven months.

Economists polled by Reuters had forecast retail sales gaining 0.2% in October. Compared to October last year, retail sales advanced 3.1%.

Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3% last month. Data for September was revised lower to show the so-called core retail sales slipping 0.1% instead of being unchanged as previously reported. Core retail sales correspond most closely with the consumer spending component of gross domestic product.

The rebound in core retail sales added to reports this week showing firming inflation in supporting the Federal Reserve’s signal that it will probably not cut interest rates again in the near term. Other reports this month have shown solid job growth in October and an acceleration in services sector activity.

The data and easing trade tensions between Washington and Beijing have diminished financial market fears of a recession. Fed Chair Jerome Powell told lawmakers on Thursday that “the U.S. economy is the star economy these days,” compared to other advanced economies and “there’s no reason that can’t continue.”

The U.S. central bank last month cut rates for the third time this year and signaled a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.

Consumer spending, which accounts for more than two-thirds of the economy, increased at a 2.9% annualized rate in the third quarter. The economy’s engine is being powered by the lowest unemployment rate in nearly 50 years and has helped to blunt the hit on the economy from the White House’s 16-month trade war with China, which had led to a decline in capital expenditure and a recession in manufacturing.

Auto sales increased 0.5% in October after declining 1.3% in September. Receipts at service stations surged 1.1%, reflecting higher gasoline prices, after dipping 0.1% in the prior month. Online and mail-order retail sales increased 0.9% after gaining 0.2% in September.

But sales at electronics and appliance stores fell 0.4%.

Receipts at building material stores dropped 0.5% and sales at clothing stores declined 1.0%. Spending at furniture stores fell 0.9%, the largest decline since December 2018.

Americans also cut back on spending at restaurants and bars, with sales falling 0.3%, the most in nearly a year. Spending at hobby, musical instrument and book stores dropped 0.8%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. Retail Sales Rebound But Details Show Consumer Cooling By Bloomberg



(Bloomberg) — U.S. rebounded by slightly more than estimated in October on gains from auto dealers and filling stations, though declines in categories including clothing and furniture stores tempered the advance.

The value of overall sales increased 0.3% from the prior month after a 0.3% drop in September, Commerce Department figures showed Friday. The median estimate in a Bloomberg survey called for a 0.2% advance.

Sales in the “control group” subset, which some analysts view as a more reliable gauge of underlying consumer demand, increased 0.3% as projected. The measure excludes food services, car dealers, building-materials stores and gasoline stations.

The reading signals consumers remain willing to spend, though at a slower pace than earlier this year, as the robust jobs market and solid wage gains offer reasons for Americans to remain upbeat. Consumers have driven the economy forward in recent quarters, and Friday’s data suggest the trend may continue in the final three months of the year.

“It’s not screaming softness on the consumer but the consumer is gradually fading,” said Stephen Gallagher, chief U.S. economist at Societe Generale (PA:) SA. “We’re more dependent on the consumer than ever in this expansion, and we’re getting some signs the consumer is slowing.”

Federal Reserve Chairman Jerome Powell reiterated this week that the labor market is strong, following an October jobs report that showed payroll gains intact and the jobless rate still near a half-century low. Solid employment would continue to underpin consumer spending.

But the retail report also included some signs that may point to consumers running low on steam, with seven of 13 major categories dropping. Sales at furniture and home furnishing stores fell 0.9% while food service and drinking places decreased 0.3%, both posting the steepest declines of this year.

Control-group sales have increased an annualized 4% over the latest three months compared with a 6.3% rate in the same period through September.

A separate report Friday from the New York Fed showed manufacturing weakness persisted this month. The Empire State factory gauge, based on a survey of companies in New York, fell to 2.9, compared with forecasts for a gain, pointing to tepid growth in the sector.

Later Friday, the Fed is due to report national figures for industrial production in October.

Nonstore retailers, which include online shopping, were a bright spot. They posted a 0.9% gain from the prior month and were up 14.3% from a year earlier, the most of any major group.

Filling-station receipts increased 1.1%, the report showed. The retail figures aren’t adjusted for price changes, so sales could reflect changes in gasoline costs, sales, or both.

Spending at automobile dealers climbed 0.5% after decreasing 1.3% in the previous month. That contrasted with industry data from Wards Automotive Group that previously showed auto sales slumped to a six-month low in October.

Excluding automobiles and gasoline, retail sales edged up 0.1% — below forecasts — after a decline the previous month.

Retail sales estimates in Bloomberg’s survey of economists ranged from a 0.2% decline to a 0.7% gain from the prior month.

The sales data capture don’t capture all of household purchases and tend to be volatile because they’re not adjusted for changes in prices. Personal-spending figures will offer a fuller picture of U.S. consumption in data due at the end of the month.

A separate Labor Department report Friday showed the U.S. import price index fell 0.5% in October from the prior month and 3% from a year earlier, the most in three years. Excluding petroleum, the index decreased 0.1% from the prior month.



U.S. retail sales rebound; manufacturing output tumbles By Reuters



By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season.

The report from the Commerce Department on Friday pointed to a moderate pace of consumer spending that probably remains sufficient to offset some of the drag on the economy from a downturn in the industrial sector.

“Consumers are easing off their spendthrift ways from the second quarter and are adopting more prudent attitudes, perhaps still nervous over trade tensions and the slowing of hiring -though that still remains robust,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.

“Should these trends continue we will be facing a not-so-merry holiday shopping season.”

Retail sales increased 0.3% last month, lifted by motor vehicle purchases and higher gasoline prices, reversing September’s unrevised 0.3% drop, which was the first decline in seven months. Economists polled by Reuters had forecast retail sales gaining 0.2% in October.

Compared to October last year, retail sales advanced 3.1%.

Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3% last month. Data for September was revised lower to show the so-called core retail sales slipping 0.1% instead of being unchanged as previously reported. Core retail sales correspond most closely with the consumer spending component of gross domestic product.

The dollar fell against a basket of currencies. U.S. Treasury prices slipped. U.S. stock were slightly higher.

USA-ECONOMY-RETAILSALES interactive – http://fingfx.thomsonreuters.com/gfx/rngs/USA-ECONOMY-RETAILSALES/010030JR15Y/index.html

MANUFACTURING WOES DEEPEN

Consumer spending, which accounts for more than two-thirds of the economy, increased at a 2.9% annualized rate in the third quarter. It is being supported by the lowest unemployment rate in nearly 50 years and has helped to blunt the hit on the economy from the White House’s 16-month trade war with China.

The U.S.-China trade war has led to a decline in capital expenditure and a recession in manufacturing.

Other data on Friday from the Federal Reserve showed manufacturing output tumbling 0.6% in October, the most since May 2018, after dropping 0.5% in September.

Output at factories was weighed down by an 11.1% plunge in motor vehicle production because of a 40-day strike by workers at General Motors (N:). Excluding auto production, manufacturing output slipped 0.1% last month.

The rebound in core retail sales added to reports showing stabilizing inflation in supporting the Federal Reserve’s signal that it will probably not cut interest rates again in the near term. Other reports this month have shown solid job growth in October and an acceleration in services sector activity.

The data and easing trade tensions between Washington and Beijing have diminished financial market fears of a recession. Fed Chairman Jerome Powell told lawmakers on Thursday that “the U.S. economy is the star economy these days,” compared to other advanced economies and “there’s no reason that can’t continue.”

The Fed last month cut rates for the third time this year and signaled a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.

Auto sales increased 0.5% in October after declining 1.3% in September. Receipts at service stations surged 1.1%, reflecting higher gasoline prices, after dipping 0.1% in the prior month. Online and mail-order retail sales increased 0.9% after gaining 0.2% in September.

Walmart Inc (N:) on Thursday reported better-than-expected earnings for the third quarter, driven by food sales. The world’s largest retailer raised its annual outlook.

But the retrenchment in purchases of big-ticket household items casts a cloud on the holiday shopping season, which typically kicks off around Thanksgiving.

Sales at electronics and appliance stores fell 0.4% last month and receipts at clothing stores declined 1.0%. Spending at furniture stores fell 0.9%, the largest decline since December 2018. Receipts at building material stores dropped 0.5%.

Purchases of these items were likely hurt by the broadening in October of tariffs on imported Chinese goods to include a range of consumer goods.

Americans also cut back on spending at restaurants and bars, with sales falling 0.3%, the most in nearly a year. Spending at hobby, musical instrument and book stores dropped 0.8%.

A separate report on Friday from the Labor Department showed import prices fell more than expected in October, pulled down by declines in the prices of petroleum products and food, suggesting inflation could remain moderate despite an increase in overall consumer and producer prices in October.

The Labor Department said import prices dropped 0.5% last month. Data for September was revised lower to show import prices gaining 0.1% instead of climbing 0.2% as previously reported.

Export prices dipped 0.1% in October after falling 0.2% in the prior month. Export prices decreased 2.2% on a year-on-year basis in October, the most since August 2016, after falling 1.6% in September.

U.S. import prices and oil DataStream Chart – http://fingfx.thomsonreuters.com/gfx/rngs/USA-ECONOMY/010030JD153/18sv1214mfc6.htm



Alibaba’s Singles’ Day sales hit record $38 billion; growth slows


HANGZHOU, China (Reuters) – Chinese retailer Alibaba Group Holding Ltd’s sales for its 24-hour Singles’ Day shopping blitz hit a record $38.4 billion, more than U.S. rival Amazon.com Inc’s haul last quarter from online store sales.

But sales growth for the annual shopping festival eased to 26%, the weakest since the event started in 2009, held back by a slowing e-commerce industry in China as the country’s economic expansion heads toward a historic low.

The event tmsnrt.rs/2WTFm7V, a gauge of Chinese consumer sentiment, has also become a shop window this year for Alibaba as it plans to sell $15 billion worth of shares in Hong Kong this month. The U.S.-listed firm has spent big to diversify its business yet still earns over four-fifths of revenue from e-commerce.

Alibaba turned China’s informal Singles’ Day into a shopping event in 2009 and built it into the world’s biggest online sales fest, dwarfing Cyber Monday in the United States which took in $7.9 billion last year. The name is a play on the date, Nov. 11, rendered 11/11 – or Double Eleven, as the event is also known.

The event has since been replicated at home and abroad, with Singles’ Day promotions found at rivals such as China’s JD.com Inc and Pinduoduo Inc as well as South Korea’s 11thStreet and Singapore’s Qoo10.

Alibaba said on Monday its gross merchandise volume or GMV for the whole event came in at 268.4 billion yuan ($38.4 billion), up 26% from last year but below Citic Securities’ forecasts for a 20-25% expansion.

In 2018, it posted a 27% sales increase.

CELEBRITY START

The Chinese retail juggernaut, with a market value of $486 billion, kicked off this year’s 24-hour shopping bonanza with a live performance by U.S. pop star Taylor Swift followed by live-streamed marketing of over 1,000 brands.

The firm said 84 brands including those of Apple Inc, L’Oreal SA and Fast Retailing Co Ltd’s Uniqlo each made over 100 million yuan in sales in the first hour.

Over half of merchants on its Tmall marketplace used live streaming to sell products during the event, and sales generated through the medium surpassed 10 billion yuan at 8.55 a.m. (0055 GMT), Alibaba said.

“Nearly all our brands have opted for livestreaming promotions some time this year,” says Josh Gardner, who helps overseas companies sell products on Tmall as CEO of Kung Fu Data.

A screen shows the value of goods being transacted during Alibaba Group’s Singles’ Day global shopping festival at the company’s headquarters in Hangzhou, Zhejiang province, China, November 12, 2019. REUTERS/Aly Song

“It’s more entertaining than browsing through a product detail page. Traffic from livestreaming is easy to convert into transactions, and Tmall has supported stores that run livestreaming activities with resources.”

One vendor, New Zealand-based nutritional supplement maker Clinicians, broadcast livestreams from a booth set up on Alibaba’s campus. According to Carlos Zhao, China market manager, the company has seen a 40% jump in sales after it started livestreaming in China six months ago.

“This is a product form from new Zealand, everything is in English, and so many people are selling similar products, so customers wonder, ‘Which one do I choose from?’” he told Reuters. “Having a livestreamer can help to break those barriers.”

Tmall has said it expects over 500 million users to make purchases this year, about 100 million more than last year. It has also put more emphasis this year on promotions targeting areas outside of China’s massive first- and second-tier cities.

“The younger generation is buying more, and the customer from rural areas, the customers from lower-tier cities, they are buying imported products,” Tmall General Manager Alvin Liu told reporters.

Singles’ Day is known to be a stressful time for Alibaba employees with workers sleeping at the office to keep up with orders.

This year, at Alibaba’s campus in Hangzhou, workers bustle around in red t-shirts with the slogan ‘Make 11 happen’.

Slideshow (14 Images)

Percussion echoes through halls as departments bang large drums each time a sales record is broken. Pink rice cakes – dingshenggao, or ‘victory cakes’ eaten by Yue Army soldiers during the Song Dynasty – fill the office snack bars.

This is the first time Alibaba’s Singles’ Day is being held since its flamboyant co-founder Jack Ma resigned as chairman in September to “start a new life”.

Reporting by Josh Horwitz in Hangzhou; Additional reporting by Brenda Goh in Shanghai and Cheng Leng in Beijing; Editing by Christopher Cushing, Emelia Sithole-Matarise and Himani Sarkar



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CBS misses revenue estimates as AT&T dispute hurts ad sales


FILE PHOTO: The CBS Television Center is seen in Los Angeles, California, U.S., August 7, 2019. REUTERS/Lucy Nicholson

(Reuters) – CBS Corp (CBS.N) fell short of Wall Street estimates for third-quarter revenue on Tuesday, as a 19-day carriage dispute with AT&T Inc (T.N) pressured advertising sales during the period.

Shares of CBS and sister company Viacom Inc (VIAB.O) were down more than 3% in morning trading.

CBS stations went dark for more than 6.5 million DirecTV, DirecTV Now and AT&T U-verse customers in at least 14 U.S. cities, including New York, Los Angeles and Chicago, before CBS and AT&T signed a new content carriage agreement on Aug. 8.

Sales from advertising, which was also hurt by the timing of the broadcast of certain sporting events, fell 6.8% to $1.18 billion in the quarter from a year earlier. The year-ago period was boosted by the 2018 U.S. midterm elections related ads.

The distributor of renowned shows such as “The Twilight Zone” and “NCIS” reported an 11.5% increase in its affiliate revenue, or the fees collected from cable, satellite and online distributors, to $1.12 billion.

CBS is in the process of re-uniting with Viacom to create a larger multi-platform content company and re-make media mogul Sumner Redstone’s U.S. entertainment empire at a time of intensifying streaming wars. The merger would bring in an expansive slate of over 3,600 movies and 140,000 television episodes for ViacomCBS Inc.

Net earnings fell to $319 million, or 85 cents per share, in the third quarter ended Sept. 30, from $488 million, or $1.29 per share, a year earlier.

Adjusted earnings came in at 95 cents per share, beating analysts’ average estimate of 92 cents, according to IBES data from Refinitiv.

CBS posted a 1% rise in revenue to $3.30 billion, but missed analysts’ average estimate of $3.36 billion.

Reporting by Ambhini Aishwarya and Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila



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Alibaba says Singles’ Day sales hit 91.2 billion yuan in first hour


The logo of Alibaba Group is seen during Alibaba Group’s 11.11 Singles’ Day global shopping festival at the company’s headquarters in Hangzhou, Zhejiang province, China, November 10, 2019. REUTERS/Aly Song

SHANGHAI (Reuters) – Chinese e-commerce giant Alibaba Group Holding Inc said on Monday that sales for its annual Singles’ Day shopping blitz hit 91.2 billion yuan ($13 billion) within the first hour, up 32% from last year’s early haul of 69 billion yuan.

Akin to Black Friday and Cyber Monday in the United States, Singles’ Day has been promoted as a shopping fest by Alibaba Chairman and Chief Executive Daniel Zhang since 2009, growing rapidly to become the world’s biggest online sales event.

Also known as “Double Eleven”, the festival’s name originates from the calendar date 11/11, with the four ones referencing being single. Alibaba saw sales worth $30 billion on its platforms on Singles’ Day last year, dwarfing $7.9 billion U.S. online sales for Cyber Monday. Yet the 27% sales growth was the lowest in the event’s 10-year history, spurring a search for fresh ideas.

The $486 billion Chinese retail juggernaut kicked off this year’s 24-hour shopping fest with performances by American pop star Taylor Swift and local celebrities like Jackson Yee.

This is the first time Alibaba’s Singles’ Day does not have flamboyant co-founder Jack Ma at its helm, after he resigned in September as chairman.

It also comes at a crucial time for the company, which is looking to raise up to $15 billion via a share sale in Hong Kong this month.

Alibaba continues to dominate the online shopping industry, but not without competition.

In addition to longtime rival JD.com, it now faces competition from upstart Pinduoduo, which surged in popularity in 2017 by targeting consumers in China’s lower-tier cities.

Reporting by Josh Horwitz; Editing by Himani Sarkar and Jan Harvey



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U.S. wholesale inventories revised lower, sales flat By Reuters



WASHINGTON (Reuters) – U.S. wholesale inventories fell more than initially estimated in September to post their biggest decline in nearly two years, suggesting inventory investment could continue to weigh on economic growth.

The Commerce Department said on Friday wholesale inventories fell 0.4% in September, instead of the previously reported 0.3% decline, after having risen 0.1% in August. Inventories were up 4.8% on a year-on-year basis in September.

The decline in September was the largest since October 2017.

The component of wholesale inventories that goes into the calculation of gross domestic product fell 0.3% in September.

The pace of inventory accumulation has been slowing after stocks increased strongly from the third quarter of 2018 through the first quarter of this year. The inventory overhang has led businesses to place fewer orders at factories, contributing to a downturn in the manufacturing sector, which also has been hurt by uncertainty over the ongoing U.S-China trade negotiations.

But inventories shaved economic growth only slightly in the third quarter, when the economy grew 1.9%, after chopping 0.91 percentage point from growth in the second quarter, when GDP increased by 2.0%.

In September, wholesale auto inventories fell 1.2% after declining 0.3% in the prior month. There were also declines in furniture, metals, hardware and nondurable goods.

Stocks of lumber, professional equipment and machinery posted increases.

Sales at wholesalers were unchanged in September after falling 0.1% in August. Motor vehicle sales slumped 3.1% in September after edging up 0.1% in the previous month.

At September’s sales pace it would take wholesalers 1.36 months to clear shelves, unchanged from August.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Australian weak retail sales, jobs point to need for more stimulus By Reuters


© Reuters. A woman carries her shopping bag containing purchased goods as she stands with other commuters at a bus stop in central Sydney

By Swati Pandey

SYDNEY (Reuters) – Australian retail sales surprisingly fell last quarter while growth in September was weaker-than-expected, underlining the need for even more stimulus to jumpstart the slowing economy.

Retail sales inched up 0.2% in September after a respectable 0.4% gain in August, figures from the Australian Bureau of Statistics (ABS) showed on Monday. Analysts polled by Reuters had expected an increase of 0.5%.

Quarterly data showed sales slipped 0.1% in inflation-adjusted terms in the three months to September following an already sedate June quarter. Analysts were looking for a 0.2% rise.

Retail volumes have now recorded falls in three of the past four quarters to be down 0.2% from a year ago. The last time annual volumes were this weak was in the early 1990s recession. 

In another worrying sign for the economy, separate data on Monday showed Australian job advertisements in newspapers and on the internet fell 1% in October to the lowest level in more than 2-1/2 years.

The gloomy figures knocked the Australian dollar off a near three-month peak to $0.6904.

“The fall in real retail sales in the third quarter underlines that the RBA still has more work to do,” said Marcel Thieliant, Singapore-based senior economist at Capital Economists.

The Reserve Bank of Australia (RBA) last month chopped its benchmark rate for a third time this year to a record low 0.75% in a bid to revive employment growth, consumer spending and inflation.

GDP growth would continue to fall short of potential next year and the RBA “will have to cut interest rates by more than most anticipate”, he added.

Australia’s annual gross domestic product (GDP) growth has weakened to the slowest in a decade and indicators so far suggest the lacklustre momentum could continue for a while. Third-quarter GDP data is due next month.

Investors are looking ahead to the RBA’s monthly policy meeting due at 0330 GMT on Tuesday, where it is likely to stay on the sidelines as it awaits the impact of its stimulus so far.

Financial futures are pricing in a 60% chance of a cut to 0.5% early next year, with some economists speculating the need for unconventional policy measures or quantitative easing (QE) such as bond purchases or discounted lending to banks.

“We expect the RBA to embark on some form of QE. This could come as early as February 2020,” Citi economist Josh Williamson wrote to clients last week.

“With bank pass-through of conventional policy to lending rates becoming constrained, our forecast for the next cash rate move in February 2020 implies that this date is the first opportunity for the RBA to announce a QE programme.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Hong Kong Retail Sales Continue Decline in September Amid Unrest By Bloomberg


© Reuters. Hong Kong Retail Sales Continue Decline in September Amid Unrest

(Bloomberg) — The record weakness facing Hong Kong’s hard-hit retailers continued, albeit at a slower pace, in September as violent protests helped push the city into a recession, data released Friday showed.

Retail sales by value fell 18.3% in the month, compared with a decline of a revised 22.9% in August. Retail sales by volume declined 20.4%.

Hong Kong’s economy contracted sharply in the third quarter, amid months of violent protests in the streets and ongoing trade headwinds from the U.S.-China trade war. Tourism has plummeted across the board, especially arrivals from mainland China, which accounts for almost 80% of all visitors to the city. Financial Secretary Paul Chan has repeatedly called on property owners to cut their retail tenants a break as the slump continues.

Police scuffled with protesters and Halloween party-goers in the busy entertainment and shopping area of Lan Kwai Fong Thursday. Riot police closed the holiday hotspot at around 8:30 p.m., leading to tense confrontations with costumed party-goers who were shut out.

As an example of the retail impact of the anti-China and anti-government demonstrations, operating profits among prominent local jewelers including Chow Tai Fook Jewellery Group Ltd. and Luk Fook Holdings International Ltd. may have plunged as much as 45% for the fiscal first half ended September from a year ago, said Catherine Lim, a senior analyst with Bloomberg Intelligence, in an Oct. 16 report. The jewelry chains are set to report earnings at the end of November.

“Gains from mainland Chinese tourism, which drove operating profit at these jewelers’ Hong Kong outlets more than 40% higher in the fiscal year ended March, could diminish into 2020 as a result,” Lim said.

Third-quarter gross domestic product retreated 3.2% from the previous three months, after a 0.4% contraction in the second quarter. That’s the worst slump since 2009, in the aftermath of the global financial crisis. The government said the economy is very likely to contract in 2019 from the previous year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.