Inflation fears are driving selling pressure in the retail sector


Khanchit Khirisutchalual

The retail sector slumped on Thursday after September’s consumer price report showed a 0.4% increase, indicating inflation is higher than expected. Core CPI rose 0.6% to 6.6%, also more than expected and topping the March peak. Notably, the base level is the highest in 40 years.

The likelihood of an interest rate hike jumped immediately after the report, with market odds of a 75 basis point hike at the Fed’s next meeting in November now at 95%. Fed funds futures are now also forecasting a 75-point rise in December.

Investors seem to fear that high inflation and rising interest rates will reduce consumer discretionary spending.

Notable declines in the apparel retail sector in Thursday morning trading included Rent the Runway (RENT) -4.15%Lululemon (LULU) -3.85%and Boot Barn (BOOT) -3.72%.

Etsy Online Resellers (ETSY) -9.65%Wayfair (West) -5.85%Fluffy (CHWY) -5.37%and (OSTK) -5.05%. The biggest e-commerce name of them all was also in decline with Amazon (AMZN) down 4.75%.

The target (TGT) fell 2.05% in early trading Thursday and Costco (COST) lost 2.33%while Walmart (New York Stock Exchange: WMT) stood relatively tall with just a 0.85% drop.

Dig into the details of the September CPI report.


About Author

Comments are closed.