Retailers in focus as season winds down – New York Report
A cloud of pessimism may have burned off for many investors on a bright October US jobs report on Friday, but much of the global economy – including China, which not long ago was a top worry for the US Federal Reserve – remains vulnerable.
With markets having swung in just a few weeks from pricing out a Fed interest rate hike next month to a strong likelihood it will take place, however, economic releases in the coming week may be judged simply as supporting evidence.
The US jobs report not only revealed more hiring than even the most optimistic of 101 forecasters polled by Reuters, but the unemployment rate fell to five per cent and average pay growth accelerated to a solid 2.5 per cent annual pace.
That pushed the dollar sharply higher against the euro on optimism the US economy may be stirring out of a fitful, uneven expansion into something more vigorous.
Analysts and Fed officials had mused beforehand about how to clearly explain that a slowing labour market is still capable of generating inflation, but that obstacle to a putative December rate hike has now been substantially removed.
Consumer-based companies and retailers figure heavily in the next few weeks as earnings season winds down.
This week, 16 S&P 500 components, with an emphasis on retailers and consumer-based companies, release earnings, with one Dow component, Cisco Systemsreporting.
The week, sees a lineup of retail heavyweights reporting, such as Wal Mart Stores, Home Depot, Target and Lowe.