US stocks slide from record highs as traders digest blowout retail-sales report

US stocks pulled back from record highs Wednesday morning as investors weighed whether strong retail sales indicate a positive economic recovery or a signal that could dampen congressional urgency around passing the next stimulus bill.

US retail sales soared in January by the most in seven months. Sales grew 5.3% in January, the Census Bureau said Wednesday. Economists surveyed by Bloomberg expected spending to climb by 1%. The reading snaps a three-month streak of contracting sales and follows a revised 1% decline in December. The single-month expansion is also the largest since June.

With Trump’s impeachment in the rear-view mirror, Washington is focused on passing a COVID-19 relief bill. The House and Senate are on break this week, but the House Budget Committee will undertake the job of putting the proposals that make up the Biden relief package into a bill.

On Thursday, the House Financial Services Committee will hold a hearing on the market frenzy seen when traders drove up the price of GameStop. Robinhood CEO Vlad Tenev, Citadel CEO Ken Griffin, Melvin CEO Gabriel Plotkin, Reddit CEO Steve Huffman, and “Roaring Kitty” Keith Gill are slated on the witness list for the hearing. 

Fundstrat’s Tom Lee said both the hearings and the House Budget Committee actions will be postive for markets. 

“Yes, even the hearings on “Reddit traders” — why?  The hearings will be quite a lot of public grand standing by policymakers, perhaps even accusations levied against both hedge funds and against Reddit forum users,” said Lee.

Here’s where US indexes stood after the 9:30 a.m. ET open on Wednesday:

EHang extended its two-day decline to more than 70% on Wednesday after a short-seller report from Wolfpack Research said the Chinese company is an “elaborate stock promotion.”

EHang is developing an “autonomous” aerial vehicle ridesharing network, with its main vehicle similar in design to a large drone, according to its website.

Canada’s financial regulator approved the second publicly traded bitcoin ETF in North America, the Evolve Bitcoin ETF. The approval comes just days after Canada signed off on the Purpose Bitcoin ETF, and raises hopes that the US SEC will soon follow suit. 

The price of bitcoin hit a record high above $51,700 on Wednesday, after soaring past $50,000 for the first time the previous day, bringing the biggest cryptocurrency’s market capitalization to close to $1 trillion. Yet analysts at JPMorgan said in a note the rally looks unsustainable unless bitcoin’s volatility falls.

Oil prices remained elevated as as freezing weather continues to batter Texas. West Texas Intermediate crude fell 0.73%, to $59.62 per barrel. Brent crude, oil’s international benchmark, was down 0.8% to $63.30 per barrel.

Gold fell 1.16% to $1,778 per ounce.