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Week Ahead: US consumer in focus with retail sales and earnings
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.
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, Target, Home 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.
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
|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|
|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|
|GBP||Core CPI y/y|
|GBP||PPI Input m/m|
|GBP||PPI Output m/m|
|10:00am||EUR||Final CPI y/y|
|EUR||Final Core CPI y/y|
|Tentative||GBP||Bank of England Monetary Policy Report Hearings|
|3:30pm||USD||Crude Oil Inventories|
|Thu Nov 19||12:30am||AUD||Employment Change|
|1:30pm||CAD||ADP Non-Farm Employment Change|
|USD||Philly Fed Manufacturing Index|
|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|
|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|