U.S. markets climbed on Friday to close out a strong week for equities after a lower-than-expected rise in consumer inflation fueled optimism the Fed might ease back on its monetary tightening campaign.
For the week, the Dow rose 4.2%, the S&P 500 gained close to 6%, and the Nasdaq added over 8%. Easing COVID-19 restrictions in China added to the enthusiasm, sending oil futures and shares of fossil fuel companies higher in anticipation of increased demand. However, the week only got worse for crypto markets after FTX declared bankruptcy and prices of most major coins lost ground.
Next week, big-box retailers including Walmart, Target, Macy’s, Home Depot, and Lowe’s will report earnings, in what could be the last big week of this corporate earnings season as it winds down, Investopedia cited.
On Wednesday, the U.S. Census Bureau will release retail sales data for the month of October, providing a key update on consumer spending heading into the holiday shopping season.
Fresh housing market data will also be released, with October housing starts, building permits, and existing home sales due, as well as the NAHB’s Housing Market Index. We can expect updates from the U.S. manufacturing sector with industrial production data for October and the Philadelphia Fed Manufacturing Index for November.
Retail Sales and Earnings
Some of the nation’s largest big-box retailers report next week, including Walmart, Target, Macy’s, Home Depot, and Lowe’s. Walmart earnings are projected to have declined, with expected earnings per share (EPS) of $1.31, down nearly 10% compared to the same quarter a year ago. Target earnings are also projected to have fallen in the third quarter, with likely EPS of $2.14, down nearly 30% year-over-year as the retailer slashes prices to clear inventories.
On Wednesday, the U.S. Census Bureau will report retail sales data for October, indicating whether consumers continued to spend on goods and services last month. Retail sales growth likely rebounded by 0.8% in October, following an unchanged reading in September. Consumer spending has decelerated markedly this year, as prices rose and the Federal Reserve raised interest rates. However, spending last month may have been boosted by shoppers getting a head start on holiday shopping, with Adobe Analytics expecting retailers to offer holiday sales sooner this year and consumers to try to beat inflation by buying earlier.
More Insights on the Housing Market
Additional updates on the U.S. housing market will become available next week, beginning with the release of the NAHB’s Housing Market Index on Wednesday. On Thursday, the U.S. Census Bureau will report on October housing starts and building permits. Housing starts are projected to have fallen to 1.42 million last month, down from 1.44 million in September and compared to a recent peak of close to 1.81 million in April.
On Friday, the National Association of Realtors (NAR) will release existing home sales figures for October. Existing home sales are projected to have fallen steeply last month, to 4.36 million from 4.71 million in September. This would represent the ninth consecutive month of declines, from a recent peak of 6.49 million in January. Homebuyer demand has been heavily impacted by rising mortgage rates, with the average rate on a 30-year fixed-rate mortgage surging above 7% in recent weeks according to the Mortgage Bankers Association.
