Futures are mixed ahead of a big week for major retailers as new questions emerge about the state of the U.S. consumer, a major engine powering the American economy. The S&P 500 edged 0.1 per cent higher, while Dow Jones Industrial Average futures slipped 0.2 per cent. Nasdaq futures gained 0.5 per cent. U.S. stocks hit an all-time high last week despite some recent downbeat data about jobs and, most notably last week, retail spending. Americans unexpectedly pulled back on retail spending in July by the biggest amount in more than a year, according to the Commerce Department data released Friday. Walmart and Target both post second quarter earnings this week, with Target surging under new CEO Michael Fiddelke, a 20-year company veteran who took over in February. Home improvement companies Home Depot and Lowe’s also report quarterly earnings this week. The entire sector is wrestling with stubbornly high inflation and customers that are laser focused on prices. The weak jobs and retail data has diminished the odds of any interest rate hike from the Federal Reserve. That’s good for markets because it lowers the cost of credit, but it may also suggest slowing growth at a time when inflation is elevated. The Fed has no good tool to fix a stagnating economy and high inflation at the same time, making so-called “stagflation” a worst-case scenario. The Fed is set to report minutes from its July meeting on Wednesday, which will provide more details about its thinking on interest rates. Oil prices rose Monday with Iran saying it is working with Oman on a plan to manage the transit of ships through the Strait of Hormuz. Global oil supplies have been squeezed because about 20 per cent of the world’s crude is transited through the strait on a typical day. Iran effectively shut down the strait after it was attacked by the U.S. and Israel in late February. Brent crude, the international standard, rose 1.1 per cent to US$89.50 per barrel, while U.S. In European trading, Germany’s DAX dipped 0.9 per cent at 26,416.57, while the CAC 40 in Paris lost 0.2 per cent to 8,622.43. Britain’s FTSE 100 gained 0.1 per cent to 10,751.53. Tokyo’s Nikkei 225 index gained 0.7 per cent to 69,220.25 after the Japanese government reported the economy grew slightly faster than forecast in the April-June quarter. In quarterly terms, the economy grew 0.3 per cent in the second quarter of the year. The U.S. dollar fell to 159.17 Japanese yen from 159.32 yen. The euro rose to US$1.1600 from US$1.1588.
