WALL Street’s spotlight will fall on the consumer this week. Investors will look to earnings from major retailers and data on consumer spending with the hope that the numbers will show that Americans have indulged in some retail therapy in recent weeks.
Good news on the shopping front could provide some potential catalysts for a stock market that has stumbled a bit in recent weeks.
The last two full weeks of earnings season are packed with consumer bellwethers. Macy’s will report results on Wednesday, while Wal-Mart Stores, the world’s largest retailer, will release quarterly earnings on Thursday, along with upscale department store Nordstrom and discount retailer Kohl’s. Home Depot, Target and Staples will follow the week after that.
Positive news about consumer spending could give the market some upward momentum, which has lagged since stocks wrapped up a strong July. The S&P 500 fell 1.1 per cent last week – its worst weekly performance since June.
In addition to earnings, this week’s numbers include consumer spending and sentiment figures as well as a reading on inflation, measured by the US Consumer Price Index.
Tomorrow, July retail sales will be reported by the Commerce Department. The forecast is for a 0.3 per cent gain since June, with a 0.4 per cent rise expected when car sales are excluded, according to economists polled by Reuters.
July CPI will be released on Thursday. If the CPI figure comes in between two per cent and 2.5 per cent higher year-over-year, the Fed is likely to take the data as a sign that it can start trimming its stimulus as early as September, said Keith Bliss, senior vice president at Cuttone & Co in New York.