Mixed results for the US leave retailers wary

The big news of the afternoon came from the US, as the preliminary quarter on quarter GDP figure came in at 3.9%, 0.6% higher than forecast, and better than last quarter’s 3.5%.

Unsurprisingly, this figure buoyed the Dow Jones at open, with the index starting trading at 17821. However, the US consumer confidence figures came in over 7 points lower than forecast, as well as 6 points less than last month, at 88.7. After the phenomenal run by the Dow, and a dominate dollar, this figure was a surprise. This disappointing number could not have come at a worse time, as retailers were hoping for a strong number just before the biggest retail period of the year. The Dow contracted after this news, losing around 20 points to trade near 17800.

The low price of oil was seen as an indicator of a potential rise in consumer confidence. Yet this fall in oil prices does not seem to have found its way into consumers’ pockets, as the growing price of food negates any savings made at the fuel pump. What this means for Black Friday and Cyber Monday is unclear; the increased cultural significance of these events will most likely outweigh the issues causing the poor consumer confidence number. However, sales may now not be as robust as first thought.

The monetary struggles reflected with this consumer confidence figure seem to be solely for the lower classes, as diamonds are still the proverbial best friend. Tiffany & Co saw share prices leap by nearly 400 points to 11054.4 after posting an earnings release that revealed that same-store sales grew to better-than-expected levels and revenue rose by 5.9%.

The FTSE remained flat after a meek opening this morning; however, this flatness still is near the two month high reached last week, so UK traders shouldn’t be too alarmed. This comes after the Organisation for Economic Co-operation and Development reported its forecast for UK economic recovery, expecting it to continue into 2015 and 2016. UK growth should be at 3% at the end of this year, 2.7% in 2015 and 2.5% in 2016. Despite this promise of long term growth, these positive figures couldn’t spark any excitement on the FTSE.

Finally, the OECD had less than great news for Europe, as they warned that ‘persistent stagnation’ could pervade the continent for the foreseeable future. This prediction had no bearing on the performance of the DAX, which is still riding the coattails of Draghi’s words of reassurance last week, hitting an intraday high of 9923.3 after opening at 9816.5. The euro has continued its similar, if shorter, rally, rising 03% today to 1.24783 against the dollar.