US Stocks Grind Higher as Investors Cheer Positive Retail Sales

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Key Takeaways

US stocks edge higher with futures steady as investors cheer strong retail sales data
Bitcoin, the biggest cryptocurrency, briefly trades near $58,000, the lowest for November

What’s on Focus in the Markets?

US stocks advanced modestly on Tuesday after investors cheered strong growth in retail sales. In detail, sales at US stores, online, and at restaurants, rose 1.7% in October, compared with a month earlier. The growth in sales on a retail level suggested consumers were not put off by rising inflation.

As a result, all three major stock indexes in the US gained on the day. The Dow Jones Industrial Average, for example, edged higher by 0.15%. In addition, the S&P500 and the Nasdaq Composite added 0.4%, and 0.8% respectively.

Despite the gains on Tuesday, Wall Street stocks have been pressured recently. More specifically, last week, the major averages suffered a losing week for the first time in over a month.

Previously, the rally in equities was underpinned by strong monetary support from the Federal Reserve. When the pandemic arrived, Fed officials started buying assets worth $120 billion a month. The major effort aimed to stabilize the economy and buoy the financial markets.

What’s New Around the Markets?

As soon as this month, however, the US central bank is expected to unwind as much as $15 billion from its monthly stimulus. This is one reason for concern over the record run in stocks across the board. Another one is inflation. To this end, persistently high inflation is threatening to sap markets of the elevated optimism during the year so far.

Further, to tackle rising prices, the Fed is preparing to raise rates sometime in 2022. By definition, higher rates could knock stocks and other assets that have been increasingly fashionable in times of easy-money policies.

On this note, investors are looking to the Federal Reserve’s regular policy meeting on Dec. 14-15.

What’s the Latest News on Bitcoin?

Meanwhile, in cryptocurrency markets, the price of bitcoin dropped to a monthly low of $58,350 earlier today. The lows were quickly scooped by bitcoin traders who remain confident the rally would resume. Moreover, predictions for increased adoption stay positive after the third Bitcoin ETF debuted on Wall Street on Tuesday.

The VanEck Bitcoin Strategy ETF is the third exchange-traded fund that will offer bitcoin futures to traditional investors. It joins the ProShares Bitcoin ETF and Valkyrie Bitcoin ETF which landed on the stock market a month ago.

In signs of broader crypto market access, OspreyFX listed another big-name cryptocurrency: Cardano (ADA). Dubbed the “Ethereum Killer”, ADA is rapidly growing in popularity. Interestingly, Cardano founder, Charles Hoskinson, is one of the creators of Ethereum. Be sure to check it!

What’s Next for Traders and Investors?

Looking ahead into the day, market participants are eager to find out the latest inflation report from Canada. In other words, the consumer price index will show price changes for the Canadian economy in October.

The news could quickly elevate the volatility in the Canadian dollar, presenting opportunities to enter the market.

In individual stocks, traders keep their focus on Tesla. The electric-car maker was rattled after Elon Musk started selling shares. On Tuesday, however, shares of the company jumped over 4%. As a result, Tesla regained its spot as one of only five US companies worth over $1 trillion.