Week Ahead on Wall Street: Consumer Strength

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The Economy’s Report Card

Economists and analysts spent much of last year about the health of the American consumer. Could people keep spending in the face of high prices and keep the economy chugging along? For the most part, the answer was yes. But the new question is whether that might continue in 2024.

Much of the economic data from the past few months led us to this week, as fourth quarter Gross Domestic Product – the broadest measure of economic activity – will be released. It will give us a more definitive picture of how the economy and the American consumer are doing. According to the Federal Reserve Bank of Atlanta’s GDPNow forecast, the economy is expected to have grown at an annual rate of 2.4% between October and December.

Outside of high profile economic data, earnings season is set to heat up with more than 50 companies across various industries set to report. Investors will undoubtedly keep an eye on the data deluge, but there is one group we won’t be hearing from and that’s the Federal Reserve. The central bank entered its media blackout period this past weekend, and so we’ll have to wait until after the FOMC meeting on January 30 and 31 to hear from Washington.

Economic Data and Earnings Reports

Monday

• December Leading Economic Index: As the name suggests, this is an index composed of various economic indicators that have historically led changes in the broader economy.
• Earnings: Brown & Brown (BRO), United Airlines (UAL), and Zions Bancorp (ZION).

Tuesday

• January Philadelphia Fed Non-Manufacturing Activity: The Philadelphia Fed’s survey of services executives in the region on business conditions and their outlook.
• January Richmond Fed Manufacturing Activity: The Richmond Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• January Richmond Fed Non-Manufacturing Activity: The Richmond Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• Earnings: Baker Hughes (BKR), DR Horton (DHI), General Electric (GE), Halliburton (HAL), Intuitive Surgical (ISRG), Invesco (IVZ), Johnson & Johnson (JNJ), Lockheed Martin (LMT), 3M (MMM), Netflix (NFLX), PACCAR (PCAR), Procter & Gamble (PG), RTX (RTX), Steel Dynamics (STLD), Synchrony (SYF), Texas Instruments (TXN), and Verizon Communications (VZ).

Wednesday

• January S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.
• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.
• Earnings: Abbott Laboratories (ABT), Ameriprise (AMP), Amphenol (APH), Crown Castle (CCI), CSX (CSX), Elevance Health (ELV), Freeport-McMoRan (FCX), General Dynamics (GD), IBM (IBM), Kimberly-Clark (KMB), Lam Research (LRCX), Las Vegas Sands (LVS), ServiceNow (NOW), Progressive (PGR), Packaging Corporation of America (PKG), Raymond James Financial (RJF), ResMed (RMD), Seagate Technology (STX), AT&T (T), Teledyne Technologies (TDY), TE Connectivity (TEL), Tesla (TSLA), Textron (TXT), United Rentals (URI), and W. R. Berkley (WRB).

Thursday

• Q4 GDP: The primary measure of economic growth in the United States. This will be the first reading of Q4 activity.
• December New Home Sales: While only a minority of home transactions in any given month come from new constructions, these home prices tend to be more cyclical and give insight into underlying trends.
• January Kansas City Fed Manufacturing Activity: The Kansas City Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits applications. Jobless claims have continued to show a labor market that remains strong despite having cooled.
• Earnings: American Airlines (AAL), Arthur J. Gallagher (AJG), Blackstone (BX), Comcast (CMCSA), Capital One (COF), Dow (DOW), Fair Isaac (FICO), Humana (HUM), Intel (INTC), KLA (KLAC), L3Harris Technologies (LHX), Southwest Airlines (LUV), McCormick & Co (MKC), Marsh McLennan (MMC), NextEra Energy (NEE), Northrop Grumman (NOC), Sherwin-Williams (SHW), T-Mobile US (TMUS), Union Pacific (UNP), Visa (V), Valero Energy (VLO), Western Digital (WDC), Weyerhaeuser (WY), and Xcel Energy (XEL).

Friday

• December Personal Consumption Expenditures Price Index: The Fed targets this inflation measure for its price stability mandate and believes PCE to be the best measure of consumers’ spending habits.
• December Personal Income and Spending: These numbers give insight into how Americans are doing, which is important since consumer spending accounts for about two-thirds of economic growth in the United States.
• Fedspeak: Governor and Vice Chair of Supervision Michael Barr on bank regulation. San Francisco Fed President Mary Daly speaks at the San Diego County Economic Roundtable.
• Earnings: Archer-Daniels-Midland (ADM), American Express (AXP), Colgate-Palmolive (CL), Norfolk Southern (NSC), and Robert Half (RHI).

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