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Retail sales in the US tumbled 16.4% in April, more than expected. Analysts at Wells Fargo point out the report had record declines in many categories. They see that as re-opening picks up, so should trade for many of these stores.

Key Quotes: 

“In terms of percentage declines, it was the worst month on record for everything except four categories: motor vehicles and restaurants (where the prior month was the worst), building materials (which may have gotten a boost from home and garden centers which generally remained open) and non-store retailers. The Only Winner: Online Retail”

“Consumers are still allocating a larger share of spending to groceries since they generally can’t go out to eat, but the panic buying at the outset of this nightmare appears to have settled down a bit.”

“We forecast personal consumption expenditures to drop at a 30% annualized rate in Q2. While this would already be a record decline, the worse-than-expected April retail sales report presents some downside risk to that call. But, with lockdowns starting to be lifted and many parts of the country beginning to re-open, April could very well be the bottom for many retailers, meaning sales should begin to recover in May.”