Retail Sales, Stocks Rebound, Colonial Restarts - What's Moving Markets

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Retail Sales, Stocks Rebound, Colonial Restarts  - What's Moving Markets
Credit: © Reuters.

By Geoffrey Smith -- Stocks and other risk assets are rebounding after heavy sell-offs but retail sales data for April will test the market's nerve again. Colonial has restarted the pipeline that supplies 45% of the East Coast's gasoline and diesel supplies. The closure of the Mississippi continues to disrupt flows of agricultural commodities, and both Disney and Airbnb disappoint with their quarterly reports. Here's what you need to know in financial markets on Friday, May 14th.

1. Retail sales, industrial production data

Market nerves over inflation will be tested again by the release of U.S. retail sales data for April at 8:30 AM ET (1230 GMT), which are expected to slow markedly after household stimulus checks fueled a nationwide binge in spending in March.

Overall sales are expected to have risen 1.0% in the month, while core retail sales are expected to have risen 0.7%. Anything markedly stronger than that may revive concerns that the economy is already running too hot for comfort, despite largely soothing words from the Federal Reserve this week.

Industrial production data for April are also expected at 9:15 AM ET, and will be scanned for further evidence of capacity bottlenecks contributing to the current squeeze in prices.

2. Grains hit by Mississippi blockage

A spectacular new bottleneck is fouling up agricultural commodity markets. The closure of the I-40 Interstate bridge in Memphis indefinitely, due to the cracking of a steel beam, has effectively stopped traffic in both directions on the Mississippi, the U.S.’s biggest waterway and a crucial conduit for wheat, corn, soybeans and other crops.

Disruptions are likely to last until alternative routes to market can be established.

U.S. Soybeans Futures rose 2.7% in overnight trading, while Wheat Futures rose 2.2% and Corn Futures rose 1.2%, although these movements need to be seen in the context of a broad and heavy sell-off in the previous two sessions.

3. Stocks set to rebound despite Disney, Airbnb disappointments

U.S. stock markets are set for a substantial bounce to end the week, recovering from the shock of a much higher-than-expected inflation stamp for April.

By 6:30 AM ET (1030 GMT), Dow Jones futures were up 135 points or 0.4%, while S&P 500 futures were up 0.6% and Nasdaq 100 futures were up 1.1%. All three are still on course for their first synchronized negative week since early March, however.

Stocks likely to be in focus later include Airbnb (NASDAQ: ABNB ), whose report of recovering booking volumes on Thursday wasn’t enough to stop the stock sliding in after-hours trading, and Disney, which followed Netflix (NASDAQ: NFLX ) in reporting disappointing subscriber growth for its streaming business after the bell.

Alibaba (NYSE: BABA ) will also be in focus after reporting its first quarterly loss as a public company due to a Chinese antitrust fine.

4. Colonial restarts pipeline operations

Colonial Pipeline Company has restarted its main lines that ship some 2.5 million barrels of fuel a day to the U.S. east coast, a move set to alleviate an increasingly acute regional shortage of gasoline and diesel.

Bloomberg cited unnamed sources as saying that the company had agreed to pay the ransom demanded by the hacking group DarkSide, and that the decryption tool provided by the group to unlock its systems had not been effective. Instead, the company relied on system backups to restore operations.  Elsewhere. Toshiba Corp. (T: 6502 ) became the latest high-profile company to say it had been the victim of a ransomware attack by DarkSide. 

Crude oil prices advanced in line with other risk assets in overnight trading, U.S. crude futures rising 0.9% to $64.38 a barrel and Brent futures rising 0.9% to $67.62 a barrel.

5. Musk back in DogeCoin hodlers' good books

Bitcoin recovered some ground after falling in response to Elon Musk voicing concern about its environmental impact. By 6:30 AM ET, it had rebounded over the $50,000 mark, although it remains down some 14% on the week.

DogeCoin has been the main beneficiary of reallocations between crypto asses. It’s up 36% overnight after Musk tweeted that he’s helping the founders of DogeCoin work on the energy efficiency of its processing of transactions.

Musk’s reversal on Bitcoin comes in the wake of widespread criticism of ESG-themed investors who have drawn attention to Bitcoin mining is largely powered by coal-fired power stations in China, undercutting the core mission of Musk’s car company in combating pollution and climate change.

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