US Retail Sales Show Resilience in Q3 but Face Potential Slowdown in October
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US Retail Sales (Oct) – 15/11
the US consumer has been remarkably resilient for most of this year. with only 2 negative months, in February and March. Since then, consumer spending has been steady, helped by a resilient labour market and inflation that has slowed much faster than elsewhere in the world. Q3 was particularly strong and consistent with gains of 0.5%, 0.8% and 0.7% from July to September. As we head into Q4 this week's October numbers could well see a slowdown in the pace of spending as consumers pare back ahead of the holiday seasons of Thanksgiving as well as the Christmas period. In comments made recently the CEO of Target, one of the US's largest retailers said that consumers were starting to slow the pace of their spending. Expectations are for a decline of -0.5%.
US Government shutdown deadline – 17/11
back on October 1st US lawmakers agreed a 45-day extension that averted a government shutdown, but which ultimately cost House Speaker Kevin McCarthy his job. There are huge differences of opinion on how much money the US is spending in supporting Ukraine in its battle against Russia, while recent events in the Middle East have complicated matters further. With new House Speaker Mike Johnson now in place markets are likely to get increasingly anxious the nearer to the date we get with any new deal likely to be of the variety that saw an extension at the beginning of October. Republicans want to see spending cuts due to concerns over the sharp rises in government debt as well as the rising cost of that debt. Any new deal will need to convince the markets that US debt isn't on an unsustainable upward path.
Birkenstock Q3 23 – 14/11
as IPOs go Birkenstock hasn't had a great time of it, trading consistently below its $46 listing price, the shares fell 12% on the opening day, trading down to $36 although we have since rebounded from those lows. They say timing is everything when it comes to IPO's and we can safely say Birkenstocks timing was off, given the sharp sell-off in October. One thing in its favour is that the business is profitable, with the business seeing total revenue in 2022 of $1.35bn, with net income of $202.8m. When the accounts were released prior to the IPO the revenues for the 9-months to June were estimated to be $1.2bn, and on course to beat last year's total revenue number. The money raised by the IPO as allowed the company to repay $550m in loans, reducing its total debt to €1.31bn. Will this week's Q3 numbers give the stock a decent leg up?
