Week Ahead: US consumer in focus with retail sales and earnings

Week Ahead

Will there or won’t there be a Brexit deal this week? Who knows, talks continue for now but the deadline approaches. Meanwhile we are looking to the US consumer this week with retail sales figures for October and earnings updates from Wal-Mart, Home Depot and Target among others. 

Brexit?

At the time of writing, Brexit talks are rumbling on but with no end in sight. We have a seen a lot of the usual posturing but so far the two sides remain at odds over the so-called level playing field and fishing rights. As ever, the pound will remain sensitive to headline risk. GBPUSD rallied to 1.33 last week, hitting its highest since early September, but how will markets position in the even of a cliff-edge no deal exit from the transition period at the end of December? 

US retail sales & earnings 

US consumer confidence will be tested this week as we look at the retail sales figures for October and some big earnings updates from the likes of Wal-Mart, TargetHome Depot, Lowe’s and TJX. Retailers have done well during the pandemic as consumers have spent less on experiences like holidays and dining out and more on stuff from gadgets to groceries. But how have consumers in the US fared since the end of $600-a-week stimulus cheques?   

September saw a blow-out month as retail sales grew at the fastest pace in three months, rising 1.9% after a +0.6% move in August. Consumers have built up a lot of savings and are ready to deploy these in the economy – October may see another strong month though the election may be a factor. Department stores sales rose 9.7%, whilst clothing sales were up 11%, but are still down 7.3% and 12.5% respectively on last year. 

Watch the rotation 

Last week saw a big move out of growth and momentum into value and cyclical stocks with the vaccine news from Pfizer driving a reflationary trade. Although there was some moderation in the flows later in the wee, the Nasdaq 100 came under pressure while industrials and the small cap Russell 2000 rallied well. European equities also jumped with the FTSE 100 notably making multi-month highs with its strong cyclical components. Find out what Wall Street’s big investment banks think will happen to the markets this year and in 2021. 

And finally… 

Will Donald Trump continue to press his claims? Georgia is recounting all votes by hand. The market has all but counted out the president, but are investors too sanguine about a potential constitutional crisis in the US? The truth is most Republicans know he has lost but they have one eye on the Georgia Senate run-off votes in January and they appreciate that Trump can get the vote out to counter the Democrats. If the Democrats take both seats, the Senate is split 50:50 with the casting vote in this situation resting with the Vice President. 

Top Economic Data This Week

 

Date  Time (GMT)  Currency   Event 
Sun Nov 15  11:50pm  JPY  Prelim GDP Price Index y/y 
    JPY  Prelim GDP q/q 
Mon Nov 16  12:01am  GBP  Rightmove HPI m/m 
  2:00am  CNH  Fixed Asset Investment 
    CNH Industrial Production y/y 
    CNH  Retail Sales y/y 
    CNH  Unemployment Rate 
  4:30am  JPY  Revised Industrial Production m/m 
    USD  Empire State Manufacturing Index 
  3:30pm  AUD  CB Leading Index m/m 
Tue Nov 17  12:30am  AUD  Monetary Policy Meeting Minutes 
    USD  Core Retail Sales m/m 
    USD  Retail Sales m/m 
    USD  Import Prices m/m 
  2:15pm  USD  Capacity Utilization Rate 
    USD  Industrial Production m/m 
Wed Nov 18  12:30am  AUD  Wage Price Index q/q 
  7:00am  GBP  CPI y/y 
    GBP  Core CPI y/y 
    GBP  PPI Input m/m 
    GBP  PPI Output m/m 
    GBP  RPI y/y 
  9:30am  GBP  HPI y/y 
  10:00am  EUR  Final CPI y/y 
    EUR  Final Core CPI y/y 
  Tentative  GBP  Bank of England Monetary Policy Report Hearings 
  1:30pm  CAD  CPI m/m 
    USD  Building Permits 
    USD  Housing Starts 
  3:30pm  USD  Crude Oil Inventories 
Thu Nov 19  12:30am  AUD  Employment Change 
    AUD  Unemployment Rate 
  7:00am  CHF  Trade Balance 
  9:00am  EUR  Current Account 
  1:30pm  CAD  ADP Non-Farm Employment Change 
    USD  Philly Fed Manufacturing Index 
    USD  Unemployment Claims 
  3:00pm  USD  CB Leading Index m/m 
    USD  Existing Home Sales 
  3:30pm  USD  Natural Gas Storage 
  11:30pm  JPY  National Core CPI y/y 
Fri Nov 20  12:01am  GBP  GfK Consumer Confidence 
  12:30am  JPY  Flash Manufacturing PMI 
  7:00am  EUR  German PPI m/m 
    GBP  Retail Sales m/m 
    GBP  Public Sector Net Borrowing 
  1:30pm  CAD  Core Retail Sales m/m 
    CAD  Retail Sales m/m 
  3:00pm  EUR  Consumer Confidence 
  All Day  All  G20 Meetings 

 

Top Earnings Reports This Week

Don’t forget to tune into XRay for more updates.

 

17-Nov  Walmart  Q3 2021 Earnings 
18-Nov  NVIDIA  Q3 2021 Earnings 
17-Nov  Home Depot  Q3 2020 Earnings 
18-Nov  Lowe’s Companies  Q3 2020 Earnings 
19-Nov  Intuit Inc  Q1 2021 Earnings 
20-Nov  Naspers  Q2 2021 Earnings 
18-Nov  Target Corp  Q3 2020 Earnings 
18-Nov  TJX Cos. Inc  Q3 2021 Earnings 
16-Nov  Vodafone Group  Q2 2021 Earnings