The S&P 500 ($SPX) (SPY) made for some wild trading last week with huge intraday fluctuations. Mixed news and poor bond auctions were partially to blame, but even through all the volatility, it ended the week just about flat.
This week still has earnings on deck, but there are not many names reporting that are capable of moving the market as a whole. We do have some big releases on deck with PPI, CPI, and Retail Sales.
Here are 5 things to watch this week in the Market.
Earnings
Earnings are pretty muted this week in terms of companies that can move the entire market. A few names that are worth paying some extra attention on though are Home Depot (HD) which reports on Tuesday and Walmart (WMT) which reports on Thursday. Both of these names are in the retail sector, and with a lot of emphasis being placed on the economy it will be interesting to see how their earnings and guidance come in.
Of the two, Walmart could be the more important release seeing as they are often thought of as a lower-income shopping center. If they guide down or see weakening sales it could be seen as a sign of a worsening economy.
PPI
The first big inflation number that is due is PPI and Core PPI on Tuesday Morning. The previous read came in hotter than expected and was one of the catalysts for some of the volatility over the past several weeks.
The estimated number is an increase of 0.2% for both the PPI and Core PPI. If the numbers come in hotter than expected we could see the market repeat the last release and start to sell off. If either or both come in and miss, the market could start to rally as it would play into the rate cut conversation that was had by the Fed at the last meeting.
CPI
The second inflation number of the week is due out Wednesday and that is the CPI release. Last month's releases are all lower than expected, which is typically a good sign. However, given that PPI was up last month it will be interesting to see if that bleeds over to this month's or next month's CPI reports. The expected numbers look to be also 0.2% on the monthly numbers and 3.0% on the yearly. If the numbers come in under what's expected the market could catch a bid, especially if PPI the day before comes out better than expected. If CPI comes in hot, it could be more volatility for the market as it tries and figure out what the Fed's next rate move will be.
Retail Sales
Thursday the Retail Sales numbers are due out and this is a measure of retail demand. These numbers are a little skewed as they are the total value of goods purchased, and given the higher prices of everything they could be viewed as artificially elevated. With that said, the official report is looking for a 0.4% increase on Retail Sales and a 0.1% increase on Core Retail Sales. Similar to the CPI and PPI numbers, if they miss the market could rally on a weakening economy and some rate cut hopes in September. If they beat it could be dependant on how the two prior days releases were to see if the market sells off or just stays stable.
Fed Speakers
As seems to be the norm lately there are several Fed speakers throughout the week. Usually, these just cause some local volatility while they are talking, but given the inflation and economic data out this week, it could be particularly volatile. If they come out and affirm that rate cuts are on the table, that could cancel out any poor news from the inflation prints.
Best of luck this week and don’t forget to check out my daily options article.
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.
