U.S. stock market could move with Friday’s retai

U.S. stock market could move with Friday’s retail sales
Much of the week’s economic data come on Friday, but the retail sales report will draw most of the stock market’s attention, and possibly the Federal Reserve’s as well. Read economic preview.

The report comes on a day when investors are often reluctant to leave their cards on the table, given it would be just ahead of a weekend. And, that’s especially true at a time when the weekend could bring market-moving events, in this case likely related to Syria.

“Retail sales could definitely have an effect on the market, when people’s confidence gets hurt on a Friday, it often leads to heavier selling,” said JJ Kinahan, chief strategist at TD Ameritrade in Chicago.

The August number should give investors “more of an insight into how the employment report affected people,” said Kinahan of nonfarm payrolls released last Friday, which showed less-than-anticipated jobs growth in August. “And it gives the Fed one more data point to ponder, so to speak,” he added.

“The economic calendar for this week is largely back-end loaded, and the retail sales on Friday I think will be a really good number,” because of recent gains in auto sales, according to Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank.

The PPI, or producer price index, will also be closely watched, as it’s one of the core gauges of inflation and therefore a factor “in regard to the whole tapering conversation,” said Cronk, who sees inflation trending lower, while “the Fed would like to see a little spike.”

“We still see a taper light at the September meeting, meaning the Fed will go forward with the action, but not by a large amount,” said Cronk, echoing expectations by many that the Fed could reduce its purchases by $10 to $15 billion a month.

Kinahan, however, believes the central bank “may wait one more meeting” to start cutting back on its $85 billion in monthly bond purchases.

“There is the school of thought that in the bond market the tapering is already built in, but the stock market seems to be on shaky ground, so I don’t think it’s built in” to equities, he said. http://blogs.marketwatch.com/thetell/2013/09/...ail-sales/