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Markets Rise Monday; Retail Sales, Housing Data, Fed Minutes Focus of the Week

Monday, August 15, 2022 04:36 PM | Neal Farmer
Markets Rise Monday; Retail Sales, Housing Data, Fed Minutes Focus of the Week

Markets rose Monday ahead of a relatively full week for new economic data and earnings reports. Meanwhile, Treasury yields declined as the yield curve remains deeply inverted over fears of a recession.

Speculation is also rising, ahead of the release of the minutes from the Fed's most-recent meeting scheduled for release on Wednesday, that the Fed will be less aggressive with its rate hikes as price pressures have cooled off somewhat. Lastly, investors are keeping an eye out for signals from the retail sector as retail sales data for July releases Wednesday and some of the largest retailer’s are set to report quarterly earnings.

Economic Data

Housing data and retail sales are the highlights this week with Housing Starts, Building Permits, and Existing Home Sales data for July scheduled for release. Housing starts are projected to dip slightly from an annualized rate of 1.559 million in June to 1.543 million with permits also expected to fall from 1.685 million to 1.647 million last month. Additionally, existing home sales are estimated to drop from an annualized rate of 5.12 million to 4.85 million. The new data shows a continuing downward trend in the housing market as existing home sales have been falling since January while new sales have been dropping since April.

Meanwhile, retail sales are currently expected to increase 0.2% in July after rising 1.0% the previous month. Sales excluding autos are projected to inch 0.1% higher following a 1.0% bump in June. Gasoline sales and e-retailing boosted overall sales in June as they rose 3.6% and 2.2%, respectively while building materials and clothing led losses as they dropped 0.9% and 0.4% respectively.

Lastly, initial unemployment claims are expected to inch higher from 262,000 to 266,000, capacity utilization is estimated to rise from a reading of 80.0 to 80.2, and industrial production is projected to rise 0.3%.

Retail Earnings

Retail is the highlight for corporate earnings this week as Target (TGT), Walmart (WMT), Home Depot (HD), Lowe’s (LOW), TJX (TJX), and Kohl’s (KSS) are all set to report.

Hardware stores Home Depot and Lowe’s are both expected to see a bump in earnings-per-share (EPS) from a year-ago while the rest are projected to see a drop in EPS excluding TJX who is projected to see a slight bump from $0.64 to $0.67. Target and Kohl’s are currently expected to see by far the biggest drops in EPS from its year-ago quarter as the two stores look to drive traffic with new strategies.

Other big names set to report quarterly earnings include NetEase (NTES), Applied Materials (AMAT), Vipshop (VIPS), Deere (DE), Foot Locker (FL), and Cisco (CSCO).

Economic Events this Week

Tuesday

- 8:30 a.m. - Housing Starts

- 8:30 a.m. - Building Permits

- 9:15 a.m. - Industrial Production and Capacity Utilization

Wednesday

- 8:30 a.m.- Retail Sales

- 10:30 a.m.- EIA Crude Oil Inventories

- 2:00 p.m. - Fed Minutes

Thursday

- 8:30 a.m. - Initial & Continuing Claims

- 10:00 a.m. - Existing Home Sales

- 10:30 a.m. - EIA Natural Gas Inventories

Earnings Reports This Week

Tuesday:

Before the bell:

WMT, HD, SE, HUYA, IHS, LITE,

After the bell:

A, JKHY

Wednesday:

Before the bell:

LOW, TGT, PFGC, TJX, ADI

After the bell:

CSCO, AMCR, BBWI, KEYS,

Thursday:

Before the bell:

NTES, BJ, KSS, EL, CSIQ, SPTN, TPR, NICE

After the bell:

AMAT, ROST, GLOB,

Friday:

Before the bell:

VIPS, DE, FL

Sector and Industry Sentiment

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