What to Expect in the Markets Next Week

U.S. stock markets rallied on Friday to post gains for the week, after the Labor Department’s consumer and wholesale price inflation reports showed prices increased less than expected last month, fueling optimism that inflation may have peaked. A preliminary reading of consumer sentiment for August, easing prices helped boost sentiment, although it remained near record lows as nearly half of consumers surveyed said inflation had an impact on their standard of living. The Dow Jones gained nearly 3% on the week, while the Nasdaq and S&P 500 rose more than 3%.

Major retailers will be the focus of next week’s earnings reports, starting with results from Walmart and Home Depot on Tuesday. Lowe’s, Target and TJX will report on Wednesday, followed by Ross Stores and Kohl’s on Thursday. The United States Census Bureau will be released in July retail sales figures on Wednesday, providing an important update on the strength of consumer spending. Market watchers can also expect the latest U.S. housing market updates next week, with July building permit and starts available on Tuesday, and Sales of existing houses Thursday. Wednesday, the Federal Reserve will publish the minutes of its last political meeting held in July, which could offer additional information on the decisions of the political decision-makers.

Key points to remember

  • Major retailers are reporting profits, including Walmart, Target, Home Depot, Lowe’s and Kohl’s.
  • The US Census Bureau will release retail sales figures for July on Wednesday.
  • Housing starts and building permits for July will be released on Wednesday.
  • The National Association of Realtors (NAR) reports July existing home sales on Thursday.

Event calendar:

monday august 15

  • Li Auto (LI), Tencent (TME), ZipRecruiter (ZIP *: ENGLISH) and Compass, Inc. (COMP) report income
  • NY Empire State Manufacturing Index (August)
  • NAHB Housing Market Index (August)

tuesday august 16

  • Walmart (WMT), Home Depot (HD), BHP Group (BHP), Sea Limited (SE) and Agilent Technologies (A) report income
  • Building permit (July)
  • Housing starts (July)
  • Industrial production (July)

Wednesday August 17

  • Cisco (CSCO), Lowe’s (DOWN), Analog Devices (ADI), TJX Companies (TJX), Target (TGT), Synopsis (SNPS), Keysight Technologies (KEYS), Amcor (CDMA) and Bath & Body Works (bbw) report income
  • Retail Sales (July)
  • Business inventories (June)
  • FOMC Meeting Minutes (July 26-27 FOMC Meeting)
  • Eurozone GDP growth rate – Second estimate (Q2 2022)
  • UK inflation rate (July)

Thursday August 18

  • Estee Lauder (THE), Applied materials (HUGE), NetEase (DETENTION), Ross Stores (ROST), BJ’s Wholesale Club (bj), Tapestry, Inc. (TRP), Kohl’s Corp. (KSS) and Canadian Solar (CSIQ) report income
  • Philadelphia Fed Manufacturing Index (August)
  • Conference Board Leading Index (July)
  • Existing Home Sales (July)
  • Eurozone Inflation Rates – Final Reading (July)

friday august 19

  • Deere & Company (OF) and Foot Locker (Florida) report income

Top retailers report revenue

Earnings season continues next week with reports from major retailers including Walmart, Target, Home Depot, Lowe’s and Kohl’s, among others. Walmart recently lowered its second-quarter earnings outlook and expects a decline in its operating margin over the next few quarters, according to a recent company post. The company cited high inflation as an affecting factor consumer spending in its warehouses, and encouraging greater brands prices to reduce inventory. Target’s first-quarter earnings report also fell short of expectations, due to weaker operating margins and softer consumer spending at its stores.

Wednesday, the United States Census Bureau will report july retail sales data, which will indicate whether spending has remained strong despite inflation. Retail sales growth is expected to have stagnated in July, rising only 0.1% from the previous month, compared to the 1% gain in June. Retail sales growth has slowed significantly since the start of 2022, driven by soaring inflation, falling consumption purchasing powerand a shift in consumer demand from goods to services.

Housing Market Updates

Further updates on the state of the US housing market are also expected next week, with July starts and building permit due on Wednesday. Housing starts are expected to have fallen slightly to 1.55 million units in July from nearly 1.56 million in June. Thursday, the National Association of Realtors (NAR) should be out in July Sales of existing houses, which are expected to have fallen further to 4.85 million, from 5.12 million in June. Home sales have fallen sharply in recent months, weighed down by rising mortgage rates, high house prices and declining affordability. After hitting a January high of 6.49 million units, existing home sales fell a cumulative 21% in the February-June period.

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