Week Ahead on Wall Street: All About the Consumer

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The Consumer Is the Economy

A number of economic and earnings reports this week could offer crucial insights into the current state of consumer spending, which drives roughly two-thirds of America’s economic activity.

Retail earnings reports are particularly significant in light of recent cautionary statements from big-box giants like Walmart (WMT), which warned of softening spending. With more than a half dozen major retailers reporting Tuesday, investors will look to see if this trend is widespread.

As spending falls, so does the economy. Recessionary fears have persisted for much of the past year but have not come to pass, thanks to the strength of the consumer. So, in the name of the greater good, let’s hope Americans splurge this holiday season.

Economic Report

• Tuesday
  • FOMC Minutes will provide more insight into the Fed’s view on the economy, and its decision to keep rates unchanged at its last meeting.
  • Existing Home Sales for October: They fell last month to their lowest level since 2010 in September.

• Wednesday
  • Durable Goods Orders will shed light on demand for big-ticket items.
  • Weekly 30-Year Mortgage Rate Update: It has fallen roughly 30 basis points since reaching a high of 7.9% in October.
  • Jobless Claims: Last week’s report showed initial claims rose to their highest level since July.
  • Final Consumer Sentiment for November: Preliminary numbers showed the fourth decline in a row.

• Friday
  • Monthly composite, services, and manufacturing PMIs.

Earnings

• Monday
  • Zoom (ZM) and Agilent (A): Last quarter, Zoom lowered its forecast due to a stronger U.S. dollar, which grew even stronger in the third quarter.

• Tuesday
  • Retailers bonanza: Abercrombie & Fitch (ANF), Best Buy (BBY), Dick’s Sporting Goods (DKS), Kohl’s (KSS), Nordstrom (JWN), Lowe’s (LOW), and Urban Outfitters (URBN).
  • Tech: NVIDIA (NVDA), Baidu (BIDU), and HP (HPQ). NVIDIA reported a 171% increase in data center revenue last quarter, and forecasted another 170% rise in Q3.

• Wednesday
  • Deere (DE). In its previous earnings, the world’s largest farm equipment maker saw a 34% increase in net sales.

• The New York Stock Exchange is closed on Thursday for the Thanksgiving holiday, and Friday’s trading session is shortened.

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