Week Ahead on Wall Street: Retail Hints

Estimated reading time: 5 minutes

Will renewed inflation pressure break the American consumer? After last week’s hot inflation data shifted the market narrative, that’s the burning question. We may get some answers this week.

A number of the nation’s largest retailers, including industry bellwethers Home Depot (HD), Lowe’s (LOW), Walmart (WMT), and Target (TGT) are set to report their second-quarter earnings. Will they show shoppers are pulling back to focus on necessities rather than discretionary goods? And given tariff pressures, who is absorbing more of the increase in costs, consumers or businesses? If it’s the latter, how much is that eating into their profit margins?

While results are technically backward-looking, any forward-looking guidance from the companies should offer a somewhat real-time pulse on consumer behavior. 

On the economic front, we’ll get a read on housing with homebuilder sentiment, housing starts, and existing home sales. The property market is a major driver of economic activity — and a source of major consternation given how stubbornly high mortgage rates have been.With the Federal Reserve’s next move a month away, the stakes are high.

Economic and Earnings Calendar

Monday

• August New York Services Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook. 
• August NAHB Housing Market Index: This index tracks how homebuilders feel about the current and future state of the single-family housing market.
• Earnings: Palo Alto Networks (PANW)

Tuesday

• July Building Permits and Housing Starts: Construction data is a leading indicator of economic activity.
• Earnings: Home Depot (HD), Jack Henry & Associates (JKHY), Keysight Technologies (KEYS), Medtronic (MDT)

Wednesday

• FOMC Meeting Minutes: The Federal Reserve releases detailed notes of every FOMC meeting three weeks after their conclusion. Investors often look for more information on Fed officials’ views for hints on the outlook for interest rates and the economy.
• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.
• Fedspeak: Fed Governor Christopher Waller will speak at the Wyoming Blockchain Symposium. Atlanta Fed President Raphael Bostic will discuss the economic outlook.
• Earnings: Analog Devices (ADI), Estee Lauder Companies (EL), Lowe’s Companies (LOW), Nordson (NDSN), Target (TGT), TJX Companies (TJX)

Thursday

• August Philadelphia Fed Manufacturing Activity: The Philadelphia Fed’s survey of manufacturing executives in the region on business conditions and their outlook. 
• August S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment. 
• July Leading Economic Index: This is an index composed of various economic indicators that have historically led changes in the broader economy.
•  July Existing Home Sales: Most home transactions in any given month tend to come from the existing market, and as a result set the tone for the broader housing market.
• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Initial jobless claims have remained mostly steady, while continuing claims have increased of late.
• Fedspeak: The Kansas City Fed will host dozens of central bankers, policymakers, academics and economists at its annual economic policy symposium in Jackson Hole, Wyoming on August 21-23.
• Earnings: Intuit (INTU), Ross Stores (ROST), Workday (WDAY), Walmart (WMT)

Friday

• July Retail Sales: This measures spending at retail stores and is a key indicator of consumer demand. 
• August Empire State Manufacturing Activity: The New York Fed’s survey of manufacturing executives in the region on business conditions and their outlook. 
• July Import/Export Price Indexes: These indexes track the changes in the prices of nonmilitary goods and services traded between the U.S. and the rest of the world. 
• July Industrial Production and Capacity Utilization: The industrial sector accounts for much of the cyclical swings in economic activity. 
• August University of Michigan Consumer Sentiment: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on inflation and its trajectory.
• Fedspeak: The Kansas City Fed will host dozens of central bankers, policymakers, academics and economists at its annual economic policy symposium in Jackson Hole, Wyoming on August 21-23.
• Earnings: Williams-Sonoma (WSM)

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