Signs China is reining in lending and tempering its economic growth sparked a sell-off in Shanghai that weighed on global stock markets and ultimately pushed the U.S. retail sector down 1.6 percent Monday.
The S&P Retail Index slid 5.80 points to 364.55 as the Dow Jones Industrial Average declined 0.5 percent, or 47.92 points, to 9,496.28.
Bank lending in China for August could fall below the record low of 270 billion yuan, or $39.58 billion, seen a year ago, according to the state-run Xinhua news agency. Chinese banks lent out 7.73 trillion yuan, or $1.13 trillion, through July this year, well ahead of the annual target of 5 trillion yuan.
“It’s basically a signal that they want things to cool off,” said Paul Nolte, director of investments at Hinsdale Associates. “The expectation was that China was going to be the global driver for economic recovery instead of the U.S. They were going to be picking up the slack. If China’s trying to slow their economy, that’s not good for the rest of us.”
The Shanghai Composite Index sank 6.7 percent to 2,667.75 Monday, its sixth-largest decline since January 2000.
U.S. stocks have continued to rise from the depths of the financial crisis as investors anticipate an economic comeback that has yet to begin in earnest. Retail stocks rose 2.8 percent last month and are up 30.5 percent so far this year. Among the retailers losing ground Monday were Abercrombie & Fitch Co., down 4.3 percent to $32.29; Saks Inc., 4.2 percent to $6.10; The Talbots Inc., 3.9 percent to $5.96; Coach Inc., 3.4 percent to $28.29; Tiffany & Co., 3.2 percent to $36.38, and The Wet Seal Inc., 3 percent to $3.51.
“Our market has gotten so far ahead of economic fundamentals…so any ill wind that’s blowing is going to affect the market,” Nolte said. The focus is now on the holiday season, with many projecting a turnaround, and Nolte said stocks could experience a “correction” if retail sales continue to falter.
The other Asian markets held relatively steady on Monday with the Nikkei 225 in Tokyo slipping 0.4 percent and the Hang Seng Index in Hong Kong falling 1.9 percent. The CAC 40 in Paris dipped 1.1 percent while the FTSE 100 in London was closed for a bank holiday.
U.S. joblessness continues to be one of the biggest problems facing retailers and the economy.
Economists expect the U.S. government will report Friday that employers shed another 228,000 jobs last month, on top of the 247,000 positions eliminated in July.
However, The Conference Board said Monday that the number of online job postings rose by 169,000 last month.
“The August increase is good news, showing what we hope will be a continued improvement in job demand this fall,” said Gad Levanon, senior economist at The Conference Board, who also noted consumer confidence is on the rise.
“While all of this is good news, the gap between the number of unemployed and the number of advertised vacancies still remains at about 11 million, with over four unemployed for every online advertised job vacancy,” Levanon said.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast