What Retail Earnings Say About Consumer Spending
What’s in Today’s Report:
- What Walmart and Home Depot Earnings Say About Consumer Spending
- Chart: Shorter Duration Yield Curves May Be Peaking
- Economic Takeaways: Retail Sales and Industrial Production
Global markets are mostly stable this morning with bond yields little changed and stock futures modestly lower as traders digest Powell’s commentary and fresh inflation data.
U.K. CPI jumped 2.0% in April to hit a 40 year high of 9.0%, slightly below estimates of 9.1% but Eurozone HICP was more encouraging as it held steady at 7.4% vs. (E) 7.5% suggesting inflation pressures in the broader Eurozone may be peaking.
Looking into today’s session we will get one economic report in the morning: Housing Starts (E: 1.766M) and one Fed speaker at the close: Harker (4:00 p.m. ET) but neither should move markets.
There is a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could move yields and impact equity trading, especially on a sector level but it would take a decent surprise in the outcome of the auction.
Finally, we will get more retail earnings this morning with TGT ($3.00), LOW ($3.24) and TJX ($0.60) reporting before the bell and one notable tech earnings release after the close: CSCO ($0.86).
Bottom line, the market largely looked past Powell’s slightly more hawkish comments yesterday and instead focused on solid economic data while shrugging off soft retailer earnings. And if we see more disappointing retail earnings this morning (TGT just released terrible results and guidance and is down 17% in pre-market trading) then the market may pullback amid rising concerns about the health of the U.S. consumer given the growing headwind of inflation.
