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Retail Earnings, CPI and Other Can’t Miss Items This Week

Barchart - Sun Nov 12, 2023

Watching the 10-year auction last week turned out to be one of the better things to do. The weak performance of the auction mixed with some more hawkish than expected comments from Powell led to stocks finishing the week on a strong note. 

Disney (DIS) was another surprise last week closing almost 6 points higher after it reported. Finally, everyone's favorite trading stock Tesla (TSLA) had a tough end of the week after HSBC initiated it with a price target almost 80 points below where it was trading. It ended the week down over 2%.

This week looks like there will be plenty of market-moving events as well. We have some high-profile earnings due out in addition to plenty of manufacturing and housing news releases. Here are 5 things to watch in the markets this week.

Earnings

There are some big-name earnings out this week with some potential big consequences for both the market and the economy. Tuesday before the open we have Home Depot (HD) reporting. In addition to the fact that they are a big name, they also have direct access to how the home improvement, building, and retail shopping space is doing. Looking at the guidance and actual report may be more beneficial than just looking at the top/bottom line numbers. The same can be said for TJX Companies (TJX) and Target (TGT) which report Wednesday before the open. These also the the potential to provide some insight into the retail space, consumer spending, and what they are watching heading into the holiday season. Finally, Thursday before the open Walmart (WMT) reports. Similar to Target and TJX Companies, this could have some hidden gems in the actual report. Walmart is often where people shop when times start to get tough, so if they are expecting an increase in foot traffic it could be a sign of things to come.

CPI

Tuesday morning at 8:30 Eastern CPI numbers are due out. Inflation seems to have faded from the news cycle as of late as it appears to have come back down to normal levels, at least on the items the government tracks. Watching both Core and Regular CPI could give clues about spending and the economy heading into the Holiday season. Typically this season is when the most amount of money gets spent, so watching how inflation looks could be a tell if consumers tighten their belts and look to spend less or if things could be status quo.

Core Retail Sales

Wednesday at the same time Core Retail Sales is due out. This is a powerful indicator of actual consumer spending which is what is driving most of the US economy. As mentioned before, this is the total value of the goods sold, so in theory, it should always increase (unless we see a period of deflation). It is forecasted to come in negative this month, which would mean even with higher prices consumers are spending less. This could be seen as a bad sign for the economy as it could mean the number of actual goods and services purchased is way down.

Unemployment Claims

Thursday morning we have Unemployment claims out at 8:30. This is more of a higher level gauge of employment in a labor market that seems to be locked up. Each of the last 6 releases has been revised up showing that the actual number is slightly undercounting actual claims. If we see this number start to edge higher continually, it could be seen as a warning sign of things to come.

Building Permits/Housing Starts

Technically 2 items, both of these show how much construction is happening in residential real estate. In a market that is historically tight with high rates and high prices, watching for an increase in building Permits and Housing Starts could be considered a positive by the market. It would hopefully mean that prices would start to decline to levels that are in line with the current rates. 

Best of luck this week and don’t forget to check out my daily options article.



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On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Provided Content: Content provided by Barchart. The Globe and Mail was not involved, and material was not reviewed prior to publication.