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Wall Street moves lower on Friday after low volatility week

Retail sales fell by 0.7% in December, which disappointed realtive to Street expectations

Citigroup Inc. - Wall Street set for softer start as earnings season kicks off

12:10 pm: Slow week ends with selloff

The Dow dropped 150 points, 0.5%, to 30,840 at midday. The Nasdaq Composite slid 83 points, 0.6%, to 13,029, and the S&P 500 ticked down 25 points, 0.7%, to 3,771.

"Stocks are in the red as dealers are cutting back on their equity positions now that Biden’s relief package has been announced," CMC Markets UK analyst David Madden wrote Friday. "It is a little worrying that retail sales fell by 0.7% in December, the all-important shopping month. The November metric was revised from -1.1% to -1.4%. In addition to that, the New York Fed manufacturing reading for January was 3.5, the lowest in seven months. Lately, there has been growing evidence the US economy is cooling and today’s reports add weight to that view."

10:30 am: Proactive North America headlines:

Silvercorp Metals Inc (NSYEAMERICAN:SVM) (TSE:SVM) (FRA:S9Y) on track to meet fiscal 2021 output guidance as it reports third quarter numbers

Naturally Splendid Enterprises Ltd (CVE:NSP) (OTCMKTS:NSPDF) prepares to receive third container of NATERA Plant Based Foods from Australia

ElectraMeccanica Vehicles Corp (NASDAQ:SOLO) adds three new West Coast retail locations for its SOLO electric vehicle

NexTech AR Solutions Corp (OTCQB:NEXCF) (NEO:NTAR) (FRA:N29) signs a $470,000 six-month renewal deal with Polycom

Ideanomics Inc (NASDAQ:IDEX) (FRA:0V5) says MEG division delivered 439 vehicles in December

Codebase Ventures Inc (CSE:CODE) (FRA:C5B) (OTCQB:BKLLF) in $2.5M deal to enter bit mining to ride Bitcoin’s price rise and long-term potential

HealthLynked Corp (OTCQB:HLYK) strengthens its balance sheet as investor converts $1.3 million debt holding into equity

DGTL Inc (CVE:DGTL) (OTCQB:DGTHF) (FRA:A2QB0L) offers another private placement to include more subscribers; brings on investor relations firm

Ipsidy Inc (OTCQB:IDTY) CEO Phillip Kumnick says the company is positioned for success in 2021

BioSig Technologies Inc (NASDAQ:BSGM) says it will be presenting at the 26th Annual International Atrial Fibrillation  Symposium, held virtually on January 29-31, 2021

9:41 am: Wall Street benchmarks mostly lower

The main indices on Wall Street started Friday’s session mostly on the back foot as investors sentiment was hit by some gloomy retail sales data.

Shortly after the opening bell, the Dow Jones Industrial Average was down 0.59% at 30,809 while the S&P 500 slipped 0.23% to 3,786. The tech-heavy Nasdaq was the positive outlier, rising 0.17% in early deals to 13,131.

Traders may be struggling to get the Friday feeling after US retail sales data showed a 0.7% decline in December as well as a downwardly revised fall of 1.4% for November.

The December drop was steeper than what analyst had expected and indicated that pandemic lockdowns across the country are starting to eat into good sales as many stores are forced to stay closed.

Also having a gloomy morning was banking giant Wells Fargo & Co (NYSE:WFC), which was down 5% to US$32.93 in early trading after its fourth quarter revenues of US$17.93bn fell short of market forecasts.

7:48 am: Wall Street set for softer start

US indices are set to open on the back foot as the fourth-quarter earnings seasons gets underway.

Spread betting quotes indicate the Dow Jones Industrial Average will start some 129 points lower at 30,863 while the S&P 500 is tipped to shed 14 points at 3,782.

The tech-laced Nasdaq Composite is set to start 234 points down at 12,879.

JP Morgan was one of the first companies out of the traps with its fourth-quarter numbers. Net income rose to US$12.14bn, equivalent to US$3.79 a share, from US$8.52bn in the same period of 2019. Analysts had expected earnings per share of US$2.62; adjusted for non-recurring items they came in at US$3.07.

“Joe Biden has now released details of his proposed $1.9 trillion stimulus plan and while positive for helping to revive the US economy, financial markets have already priced in the good news and are now starting to worry about the negative side, namely how it will be funded,” said Russ Mould, the investment director at AJ Bell.

“The large scale of the proposed support measures adds fuel to the fire that taxes and interest rates will have to go up. Both have negative connotations for equities, therefore casting a cloud on the ability for stock markets to keep rallying at the same pace they have enjoyed for much of 2021.

“However, the Federal Reserve has been at pains to stress that it won’t raise rates any time soon, so it is feasible to suggest that we could continue to see a burst of energy among stocks for a while yet,” Mould said.

Four things to watch for on Friday:

  • Aside from JP Morgan, other banks scheduled to report earnings today are Citigroup Inc (NYSE:C), which will report figures for its fourth quarter, and Wells Fargo & Co (NYSE:WFC) which will deliver third quarter numbers
  • Another financial firm on the earnings calendar is PNC Financial Service Group Inc (NYSE:PNC), which will report numbers for the fourth quarter
  • In the macroeconomic diary, investors can expect an appearance by the US producer price index, which is expected to show a 0.4% increase for December following a 0.1% increase the month before
  • Other data in the scheduled is US retail sales excluding vehicles for December, which are expected to be down 0.2% after a 0.9% decline in October, and US industrial production in December which is tipped to show a 0.5% hike after rising 0.4% in October

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