After briefly rallying to Friday's closing level, stocks declined following underwhelming retail sales data coming out of China. Cryptocurrencies also continued to decline Monday.
Goldman Sachs Senior Chairman Lloyd Blankfein cautioned over the weekend that the US is at a “very, very high risk” of falling into a recession. Blankfein didn’t close the door on avoiding recession, however, hinging avoidance on the Fed’s ability to bring down elevated inflation.
It's a busy week for markets. Earnings are starting to wind down, but there are still many notable earnings reports this week. Retail Sales data will be released Tuesday. Further, markets are due for a complete housing market update throughout the week and we'll also be getting some manufacturing data.
Retail
Retail sales due Tuesday will be released in tandem with earnings reports from some of the largest retailers in the world, Walmart (WMT) and Home Depot (HD).
Retail sales are expected to have risen by 0.9% in April and by 0.3% when excluding autos.
The big talking point from the last retail sales report was how sales declined 0.3% when excluding gasoline station sales (which rose 0.5% month/month). This underscored how rising prices - particularly at the pump - are chipping away at spending elsewhere.
Walmart's earnings, which will likely precede the economic report, should be insightful on the state of the consumer, and the company’s guidance, in particular, will be watched closely. Target (TGT) and Kohl’s (KSS) - which report earnings and Wednesday and Thursday, respectively - investors should keep an eye on Walmart's report, as guidance and comments on consumer spending, as well as the impact of ongoing shortages, could be predictive of reports to come.
Oppenheimer analyst Rupesh Parikh believes that current conditions may prove favorable for Walmart as more consumers continue to turn value-focused amidst persistent inflation.
Housing Update
The housing market gets a full update this week.
Housing starts and building permits are due Wednesday morning. Housing starts are expected to have slowed to an annualized rate of 1,775,000 homes while building permits are expected to slow to an annualized rate of 1,820,000.
In the previous report, the entire rise was attributed to multi-unit buildings as both housing starts and permits for single-family homes declined month over month. This reflects the ongoing challenges builders are facing, via ongoing shortages and rising costs.
Additionally, Existing Home Sales due Thursday are expected to show sales cool to an annual rate of 5.65 million homes sold. Affordability has continued to weigh on existing home sales as the supply of homes remains tight and higher mortgage rates weigh on demand.
Speaking of builder-related shortages, Home Depot (HD) and Lowe’s (LOW) both report earnings this week, and comments regarding those shortages are going to be highly influential on the market’s reaction to the report.
Home Depot is due on Tuesday and Lowe’s is due on Wednesday.
Economic Events this Week
Tuesday
- 08:30 ET - Retail Sales
- 08:30 ET - Retail Sales ex-auto
- 09:15 ET - Capacity Utilization
- 09:15 ET - Industrial Production
Wednesday
- 08:30 ET - Building Permits
- 08:30 ET - Housing Starts
- 10:30 ET - EIA Crude Oil Inventories
Thursday
- 08:30 ET - Continuing Claims
- 08:30 ET - Initial Claims
- 10:00 ET - Existing Home Sales
Friday
No events are scheduled for Friday.
Earnings Reports This Week
Monday:
After the bell:
TME, TTWO, SSYS, CCSI, GLBE, SHLS
Tuesday:
Before the bell:
JD, WMT, HD, SE, HUYA, KC, AER, WB, IHS, ONON, RSKD
After the bell:
KEYS, MIME, NXGN, DOCS, DLO, AGYS
Wednesday:
Before the bell:
TGT, LOW, TJX, ADI, DOYU, TGI, DT, MANU
After the bell:
CSCO, BEKE, TCOM, GDS, BBWI, SNPS, CPRT
Thursday:
Before the bell:
VIPS, KSS, BJ, CAE, WMS, PLCE, EXP, MNRO, GOOS, LSPD
After the bell:
NIO, AMAT, ROST, VFC, FLO, PANW, DECK, GLOB, AINV
Friday:
Before the bell: