From second quarter earnings results to a decline in consumer confidence as well as clarity on the timing of a rate hike following a two-day meeting of the Federal Reserve that began today, trading algorithms had a lot possible outcomes to crunch today.
As a result, stocks seemed to meander and closed the day with varied results. The Dow Jones Industrial Average gained 0.4 percent to close at 18,110.14 while the S&P 500 rose 0.3 percent to close at 2,114.76. The Nasdaq lost 0.1 percent to finish the day at 5,055.42 while the WWD Global Stock Index shed 0.7 percent to close at 114.34.
Earlier in the day, the Conference Board said consumer confidence dropped to its lowest point of the year after a robust uptick in March. On the earnings front, better-than-expected results from the United Parcel Service Inc. and Aetna Inc. buoyed a few sectors in the market – even spreading to consumer products. But retail shares lagged behind, and many issues closed the day with declines of between 0.1 and 2 percent.
There were gainers, though. Nordstrom Inc. advanced 0.3 percent to close at $77.34. And bargain-hunting investors helped push up shares of the Bon-Ton Stores Inc. by 1 percent to $7.35 and J.C. Penney & Co. Inc. by 3.4 percent to $8.60.
Of interest to retailers and other consumer companies is a report that was released today from the Urban Institute that found a drop in birth rates for Millennial women. “Between 2007 and 2012, just before and just after the Great Recession, birth rates among women in their twenties declined more than 15 percent,” the authors noted. The report showed that among non-Hispanic whites, “most of the fertility decline can be attributed to a decline in the share of women married.”
The authors speculated on whether the Millennial women “who eschewed childbearing during the recession years” will try to have children later on or will simply not bear any kids.
For consumer product companies and retailers, exploring how this trend will impact spending should be considered. For example, will Millennials without children spend more money on themselves? And for companies that serve the children’s market, how will the decline in birth rates impact sales? Time will tell. Right now, Millennials collectively spend about $600 billion on all expenditures annual, and that is expected to rise to $1.4 trillion in 2020, according to data from Accenture.