What to Expect in the Week Ahead (HD, TGT, WMT Earnings; FOMC Minutes of July Meeting)

Moomoo Breakfast US wrote a column · Aug 14, 2023 09:21

What to Expect in the Week Ahead (HD, TGT, WMT Earnings; FOMC Minutes of July Meeting)

Last week, the $S&P 500 Index (.SPX.US)$ and $Nasdaq Composite Index (.IXIC.US)$ fell 0.31% and 1.90%, respectively. It was the Nasdaq Composite's first two-week losing streak of the year.

The $Dow Jones Industrial Average (.DJI.US)$, however, gained 0.62% for its fourth positive week in five.

The upcoming week could be driven by insights into the state of the U.S. consumer, with earnings reports due from $Home Depot (HD.US)$, $Target (TGT.US)$ and $Walmart (WMT.US)$. Retail sales data from July is also due out on Tuesday morning.

The earnings reports are coming after a mixed batch of inflation reports last week, which show that price increased have eased from their post-pandemic peak but are still above the Federal Reserve's 2% target.

One open question is if businesses will seek to preserve their profit margins by passing increased wholesale prices onto customers and if they do so, if customers balk at the increases. The potentially higher prices would also influence future CPI readings, which in turn could provide more fodder for hawkish members of the Fed's Federal Open Market Committee to argue for additional rate hikes. Meanwhile, corporate earnings are showing the strain of a slowing economy and higher financing costs," Jose Torres, senior economist at Interactive Brokers, said in a note to clients on Friday.

The Census Bureau will put out retail sales data for July on Tuesday. The consensus estimate is for spending to rise 0.4% month over month following a 0.2% increase in June. Resilient consumers have powered the economy this year in the face of a contracting manufacturing sector. The National Association of Home Builders will also release its Housing Market Index for August.

On Wednesday, the Federal Open Market Committee will release the minutes from its late-July monetary-policy meeting. The FOMC raised the headline interest rate by 25 basis points. The FOMC is expected to keep interest rates steady at the September meeting, barring any inflationary surprises. Also on Wednesday, the Census Bureau will report new residential construction statistics for July.

The Conference Board will release its Leading Economic Index for July on Thursday. The consensus call is for a 0.4% decline. The LEI has fallen for 15 straight months, and the Conference Board still expects the economy to slip into a recession later this year.

Tuesday 8/15

$Agilent Technologies (A.US)$, $Cardinal Health (CAH.US)$, $Home Depot (HD.US)$, $Sea (SE.US)$ and $Jack Henry & Associates (JKHY.US)$ release earnings.

The Census Bureau releases retail sales data for July. Consensus estimate is for spending to rise 0.4% month over month following a 0.2% increase in June. Resilient consumers have powered the economy this year in the face of a contracting manufacturing sector.

The National Association of Home Builders releases its Housing Market Index for August. Expectations are for a 54.5 reading, slightly less than in July. Homebuilders' sentiment has risen sharply this year despite 30-year mortgage rates near 7%, as a slowdown in existing-home sales has created a surge in demand for new homes.

Wednesday 8/16

$Cisco (CSCO.US)$, $Target (TGT.US)$, and $TJX Companies (TJX.US)$ announce quarterly results.

The Federal Open Market Committee releases the minutes from its late-July monetary-policy meeting. The FOMC raised the federal-funds rate at that meeting by a quarter of a percentage to 5.25%-5.50%, which the majority of traders expect to be the last interest-rate hike for this cycle.

The Census Bureau reports new residential construction statistics for July. Economists forecast a seasonally adjusted annual rate of 1.45 million privately-owned housing starts, roughly even with the June data.

Thursday 8/17

$Applied Materials (AMAT.US)$, $Keysight Technologies (KEYS.US)$, $Ross Stores (ROST.US)$, $Tapestry (TPR.US)$, and $Walmart (WMT.US)$ hold conference calls to discuss earnings.

The Conference Board releases its Leading Economic Index for July. The consensus call is for a 0.3% month-over-month decline. The LEI has fallen for 15 straight months, and the Conference Board still expects the economy to slip into a recession later this year.

Friday 8/18

$Deere (DE.US)$, $Estee Lauder (EL.US)$, $XPeng (XPEV.US)$ and $Palo Alto Networks (PANW.US)$ report quarterly results.

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