Stocks Higher Before Retail Sales Data

With the dollar remaining weak, investors are finding other safe havens to store their money, which helped drive the price of oil past $75 for the first time in a year this morning. 

“Oil is the anti-dollar, like gold, and I think investors who are scared by what could happen to the dollar in the future are using those dollars to buy dollar-denominated 'real' assets that should appreciate as the greenback tanks,” said Sean Brodrick, natural-resources analyst at UncommonWisdomDaily.com.

The 5-day oil rally was extended on Tuesday when OPEC raised its near- and medium-term forecast for demand by 200k barrels per day.

Meanwhile, global equities are blazing this morning after computer chip-maker Intel posted a 17% jump in third-quarter sales after the closing bell yesterday. The $9.4 billion in profits easily beat the Street’s forecasts, and Intel predicted continued growth for the holiday period in Q4. 

The “results underscore that computing is essential to people's lives, proving the importance of technology innovation in leading an economic recovery,” said Intel’s Paul S. Otellini in a conference call, according to Business Week.

China’s Shanghai Index closed 1.17% up on the day and shares in Hong Kong closed 1.95% higher. London’s FTSE 100 was recently up 2.03%, while the French CAC-40 was up 2.12%. 

The global resurgence in equities is helping to push US equities futures higher this morning (+1.3% to +1.5%) after a seven-day rally came to a halt yesterday. Major data from the retail sector an hour before the open has the potential to extend those gains or erase them altogether. Analysts are expecting the headline to dip in September after the temporary boost from the cash-for-clunkers program in August.

Ian Shepherdson from High Frequency Economics pointed out that there’s “plenty of scope for surprise” in the headline, as the unit volume numbers “do not always translate perfectly into the dollar value data in the sales report.” He added that higher food and gas sales should boost the ex-autos figure to +0.3%. “That’s hardly great, but the worst is over,” he noted.

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