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Retail sales suggests US consumer still strong

Retail sales suggests US consumer still strong

Retail sales suggests US consumer still strong

This past week, we have seen good news coming out of the United States, as retail sales numbers were much stronger than anticipated. The Core Retail Sales month over month came in at 1.8%, much better than the anticipated -0.1% by economists. Retail Sales month over month came in at 0.7%, the inverse of the -0.7% anticipated by analysts. This suggests that consumer demand has not fallen significantly, and that perhaps the fourth quarter in the United States may continue the overall strong demand for goods and services.

One of the biggest concerns that retailers have is that there is a major shortage of components and goods, as the supply chain has been disrupted worldwide. In fact, there are stories coming out that strong consumer demand could overwhelm supply chains all the way through Christmas. Because of this, the demand is there, the real question about the US economy is going to be whether or not there will be anything to buy? Many analysts are suggesting that Christmas shopping will be done much earlier than anticipated.

China’s Evergrande falling apart

China’s Evergrande falling apart

Evergrande, China’s second largest real estate developer, has made a lot of headlines over the previous week. The China Evergrande Group plans to let consumers and step in on discounted properties this month to repay them for billions an overdue investment products, as the developer seeks to preserve cash.

Investors have stormed the company’s headquarters, demanding some type of information as details are slow to emerge. It has been noted that the Chinese government has told banks not to expect interest payments coming out of the company now, as a default of bonds has already been a factor.

We are now looking at a potential contagion risk on the Chinese mainland, as the ripple effect through the economy could cause quite a bit of trouble. This is one of the stories that could have lasting effects on risk appetite in general. This is still a developing story, and something that should be very much on your radar as financial troubles in China will certainly be felt throughout the West as well.

S&P Global reacts to El Salvador’s adoption of Bitcoin

S&P Global reacts to El Salvador’s adoption of Bitcoin

El Salvador adopting bitcoin as legal tender has negative implications for its credit rating S&P Global stated on Thursday. S&P said that the main risks were that it could threaten hopes of acquiring support with the International Monetary Fund, as well as increased for school vulnerabilities. Banks in the country could end up being damaged by creating currency mismatches when they produce loans. “The risks associated with the adoption of bitcoin as legal tender in El Salvador seem to outweigh its potential benefits,” S&P stated.

While El Salvador is rated at B- with a stable outlook, Moody’s has cut its credit rating to Caa1, which is one notch below. It also has kept the rating on a downgrade warning. While these economies themselves will not move markets very much, it is an important situation to watch for the future of crypto.

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