Casino and cruise line stocks were among the biggest losers in the S&P amid a pullback for consumer discretionary stocks.
A pullback in consumer-facing stocks on Wednesday followed a slightly soft U.S. retail sales report , which was flat from the previous month, coming up slightly short of estimates. Claire Tassin, retail and e-commerce analyst at Morning Consult, indicated the unmoved number is a sign of consumers reining in urges to splurge on big ticket and high-end items.
"Today's retail sales number is a direct reflection of inflation's impact on consumer spending. Americans have had to trade down or delay purchases as inflation continues to squeeze household budgets, and that's apparent in today's 0.0% month-over-month change in retail sales," she said.
Carnival Corp. ( NYSE: CCL ) -4.87% , Royal Caribbean ( NYSE: RCL ) -5.07% , Norwegian Cruise Line Holdings ( NYSE: NCLH ) -5.08% , Caesars Entertainment ( CZR ) -5.49% , MGM Resorts ( MGM ) -2.73% , Wynn Resorts ( WYNN ) -3.12%, Red Rock Resorts ( RRR ) -2.4% , and Penn National Gaming -3.12% were among notable decliners. Many of the stocks remain up sharply in the past month despite the notable drops on Wednesday.
To be sure, not all readers of the latest retail sales report took it to mean the consumer is losing steam. Indeed, taking autos that are challenged by supply chain troubles and understood struggles in department stores, core sales were positive. As such, Pantheon Macroeconomics Chief US Economist Ian Shepherdson was largely optimistic about the report.
"The big picture here is favorable," he said. "The hit from the surge in gas prices is barely visible in these data, because many people have been willing to absorb the blow by running down some of the huge pile of savings accumulated during the pandemic."
Shepherdson added that the core inflation data is likely to become “significantly less threatening for the Fed in the next six-to-12 months”, which should allow for a less hawkish bent at the FOMC.
"If you’re looking for recession, you won’t find it here,” he concluded.
Read more on the recently published Fed minutes .
For further details see:
Cruise, casino stocks lead declines in down day for consumer discretionary stocks