Markets were down once again on Friday. The S&P 500 was down 1.3% and Toronto was down 1.2%.
Longer term interest rates such as notably the yield on the ten year US treasury bond continued to rise this week and today and that is putting pressure on stock prices. It’s getting harder for stocks to compete with certain guaranteed investments at 5% and higher.
Canadian Retail sales for August were reported and were down 0.1% versus August on a seasonally adjusted basis. And they were up a scant 1.6% versus August last year and that’s despite a lot of inflation and a population increase of about 2.5%. The report indicates that in volume terms retail sales were down 0.7% in August versus July. This is a weak report and suggests that Consumers are starting to cut back.
American Express reported strong earnings this morning but the stock still fell 5.4%.
My next update will be for America Express. Their credit losses were up versus last year but remain below pre-pandemic levels. Their funding costs must be way up. The type of customer that pays off their credit card in full must not be as profitable with their higher funding costs. But American Express has still been gaining card holders and so they were able to over come the higher funding costs so far.