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.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)