Retail Sales Preview: Will Consumer Demand Fall? How Markets Reacted To Prior Reports

The Census Bureau is expected to publish U.S. retail sales data for April prior to the start of Tuesday's trading session. 

Here are five key takeaways for investors ahead of the report and analyst reactions to past releases. 

What Investors Need To Know

Economists expect retail sales to rebound 0.7% month over month in April, after falling 0.6% in March.

• In annual terms, retail sales jumped 2.3% in March — the smallest surge since May 2020. 
• Core retail sales (excluding automobiles) will likely increase 0.4% in April, rebounding from a 0.4% drop in March.
• Retail sales fell for the second consecutive month in March
• Increasing interest rates and cost concerns are weighing on consumers' propensity to spend.
• If retail sales fall in April, it would mark the third consecutive month of reductions. The last time three consecutive negative retail sales reports occurred was from August to October in 2015.

How Did Markets React To Prior Retail Sales Reports?

On April 14, preliminary retail sales for March delivered a 1% decline, then revised higher to a 0.6% drop, significantly lower than estimates of a 0.4% fall.

• Both the SPDR S&P 500 Trust ETF SPY and the Invesco QQQ Trust QQQ fell 0.2% on that day. 
• The Financial Select Sector SPDR Fund XLF was the best performing sector after big banks reported stronger-than-expected Q1 results ahead of market open. 
• Among large-cap stocks, JPMorgan Chase & Co. JPM was the top performer on April 14, gaining 7.55%, as Q1 EPS came in over 20% higher than expected, Benzinga pro data shows. 
• POSCO Holdings PKX and Citigroup, Inc. C were the second and the third best performing stocks, rising 4.9% and 4.7%, respectively. 
• Rivian Automotive RIVN — the worst performing name — was down 6.89%, followed by Lucid Group LCID, down 6.3%.  

Retail Sales Data for February

On March 14, preliminary retail sales for February delivered a 0.4% decline, then revised lower to a 0.7% drop, and below estimates of a 0.3% fall.

• The SPDR S&P 500 Trust ETF SPY fell 0.6% , while the Invesco QQQ Trust QQQ rose 0.5% on that day. 
• Technology Select Sector SPDR Fund XLK and Communication Services Select Sector SPDR Fund XLC outperformed as weaker-than-expected retail sales and troubles in US regional banks boosted expectations of lower Fed interest rates later in the year. 
• Among large-cap stocks, Canadian Pacific Kansas City Ltd. CP was the top performer on March 15, surging 5.65%. 
• Tech giants traded higher: Netflix, Inc. NFLX up 3%; Alphabet, Inc. GOOG GOOGL up 2.4% and 2.3%; Meta Platforms, Inc. META up 1.9%; and Microsoft Corp. MSFT up 1.8%.
• Steel Dynamics, Inc. STLD and Prudential Financial, Inc. PUK were the worst performers, down 12.5% and 10.7%, respectively.

Image by Dede from Pixabay