Retail sales growth for July was below expectations. Sales recorded no growth from the prior month despite 16 states having tax holidays in the final weekend of the month to encourage back to school sales. Economists had been expecting growth of 0.2%. After excluding sales to auto dealers and gas stations, growth was only 0.1%, below the 0.4% expected. Treasuries staged a rally today following the results and continued after the auction of $24 billion in 10-year notes in the afternoon. The 10-year yield closed down 3.4bps today.
SeaWorld's (SEAS) earnings disaster was a frequent talking point during today's session. The company missed estimates by a wide margin, citing a major drop in attendance linked to a negative publicity generated by a number of animal rights group . Late day chatter that Blackstone was seeking to take the company private was enough to get a few shorts to cover, but the outlook for that idea is dim.
Tomorrow's Financial Outlook
There are only two economic reports scheduled in the US tomorrow: weekly initial jobless claims and the import/export price index from July. Claims reached their lowest 4-week average since 2006 last week. The Treasury will sell $16 billion of new 30-year bonds in the afternoon.
The main event for risk assets overnight will be the advance eurozone second quarter GDP, scheduled to be reported tomorrow morning. Earlier this month, Italy's failed to grow for a second straight quarter. The countries left to be reported are the two majors, France and Germany, which will be a big determinant for European investor risk appetite even though the ECB is clearly keeping its dovish bias.
Consumer giant Wal-Mart (WMT) is scheduled to report earnings tomorrow, among others. Notable reports also include Advance Auto Parts (AAP), JCPenney (JCP), Agilent (A), Autodesk (ADSK), Kohl's (KSS), Plug Power (PLUG), and Applied Materials (AMAT).
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