- Retail sales data from US, China, UK and Canada all due this week
- US retailers Walmart, Target and Home Depot among reporters
- Especially busy week for UK data: jobs, wages and inflation
This week we will find out whether and how surging energy prices and global supply chain issues have impacted consumer spending, and what this might mean for the markets. We already know US consumer sentiment hit a 10-year low, according to a University of Michigan’s closely-watched survey that was released at the back end of last week. With sentiment downbeat among consumers, this might be reflected in lower levels of spending in the months. We will get to see the latest retail sales data for the month of October from the US, as well as some of the other largest economies in the world. Meanwhile we will have earnings from top US retailers such as Walmart, Target and Home Depot to provide as an alternative snapshot of the health of the US consumer.
US retail sales and top retailers’ earnings eyed
After the biggest increase in inflation in three decades and a 10-year drop in US consumer, this week’s publication of indicators about the health of consumer at the world’s largest economy will be scrutinized closely. US retail sales numbers are due on Tuesday, when we will also get earnings results from retailers Home Depot and Walmart, with Target and Lowe’s, as well as Chipmaker Nvidia, all set to post their results a day later on Wednesday. Headline sales are actually expected to have climbed 1.2% month-over-month after a 0.7% increase the month before, while core sales are seen rising 1.0% on the month. Given the surge in inflationary pressures and the drop in consumer sentiment, there is greater risk of a negative surprise than a positive one. If so, we could see the dollar and potentially stock markets dip in reaction, with the latter also likely to respond to the results od those retailers.
China surprises with stronger retail sales data
China was this week’s first major economy to publish its retail sales figures overnight. Contrary to economists’ expectations that sales would decline in October to 3.8% y/y from 4.4% the month before, they actually came in much better at +4.9% while the nation’s industrial production data (+3.5% vs. 3.0%) also beat expectations. The stronger data helped to keep the stock market bulls happy this morning as shares in Hong Kong rallied, with US futures and European markets mostly being higher too in the first half of today’s session.
UK and Canadian data also in focus
As well as China and the US, we will also have retail sales figures from UK and Canada this week, both coming in on Friday. In fact, it will be a busier week for UK, as we will also see the release of jobs and wages data on Tuesday, and CPI on Wednesday. On a micro level, UK-listed companies reporting results include Royal Mail (Thursday) and Vodafone (Tuesday). The FTSE, which broke out of a 6-month consolidation zone to the upside recently, could head towards its all-time highs should the macro and micro backdrop remain supported:
Source: ThinkMarkets and TradingView.com
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