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What to expect in the markets this week

Coming up next week: earnings from major retailers, April retail sales, housing market updates, G7 summit.

"Retailers' Earnings Reports and Key Market Indicators to Watch This Week"


This week presents a critical juncture in the earnings season, with major retailers such as Walmart, Target, Home Depot, and Alibaba among those slated to report. Key consumer data is on the docket as well, with the U.S. Census Bureau expected to provide an update on April retail sales, alongside fresh data on the housing market. From a global perspective, the release of gross domestic product (GDP) readings from Japan and the eurozone, along with Canada's inflation data, will provide important economic insights. Wrapping up the week is the 2023 Group of Seven (G7) summit, set to commence in Hiroshima, Japan.

Key Highlights to Monitor This Week in the Market

  • Major Retailers' Earnings Reports: Walmart, Target, Home Depot, and Alibaba are among the significant retailers set to release their financial reports this week.

  • April Retail Sales Data: The U.S. Census Bureau will provide an update on April retail sales, providing valuable insights into consumer spending patterns.

  • Housing Market Updates: Data on building permits, housing starts, existing home sales, and the NAHB's Housing Market Index for May will offer a comprehensive view of the current housing market.

  • International Economic Updates: Expect GDP readings from Japan and the eurozone, along with an inflation reading from Canada.

  • 2023 G7 Summit: The G7 summit will commence in Hiroshima, Japan, serving as a crucial platform for global economic discussions.

This Week's Events Calendar

Monday, May 15 – Earnings reports from Mitsubishi Financial Group (MUFG), Nu Holdings (NU), Ryanair Holdings (RYAAY), XP Inc. (XP), and Catalent (CTLT); release of the NY Empire State Manufacturing Index (May)

Tuesday, May 16 – Earnings reports from Home Depot (HD), Sea Limited (SE), Baidu (BIDU), Vodafone Group (VOD), Keysight Technologies (KEYS), and Tencent Music Entertainment Group (TME); release of the U.S. Retail Sales (Apr), Industrial Production (Apr), Business Inventories (Mar), Retail Inventories (Mar), NAHB Housing Market Index (May), Euro Area GDP Growth Rate - Second Estimate (Q1 2023), Japan GDP Growth Rate - Preliminary Estimate (Q1 2023), and Canada Inflation Rate (Apr)

Wednesday, May 17 – Earnings reports from Cisco Systems (CSCO), TJX Companies (TJX), Target Corporation (TGT), Synopsys (SNPS), Copart Inc. (CPRT), ZTO Express (ZTO), and Take-Two Interactive Software Inc. (TTWO); release of Housing Starts (Apr), Building Permits (Apr), and Euro Area Inflation Rate - Second Estimate (Apr)

Thursday, May 18 – Earnings reports from Walmart (WMT), Alibaba (BABA), Applied Materials Inc. (AMAT), Ross Stores (ROST), KE Holdings (BEKE), and Bath & Body Works (BBWI); release of the Philadelphia Fed Manufacturing Index (May), Conference Board Leading Economic Index (Apr), and Existing Home Sales (Apr)

Friday, May 19 – Earnings reports from Deere & Company (DE) and Foot Locker Inc. (FL); commencement of the 2023 G7 Summit in Hiroshima, Japan

Retail Earnings and Consumer Sentiment

Major retailers such as Walmart, Target, Home Depot, and Alibaba are set to share their earnings this week. With Walmart leading the pack in terms of revenue, an expected earnings per share (EPS) of $1.31 marks a significant increase from $0.74 per share reported in the same quarter last year. Conversely, Target's EPS is projected to be at $1.80, slightly lower than the $2.16 recorded a year ago.

Tuesday will also bring the U.S. Census Bureau's report on April's retail sales, serving as a proxy for gauging consumer spending. Sales are estimated to have risen by 0.7% last month, bouncing back from a 0.6% decline in March. Despite this, the year-over-year increase is projected to be a modest 1.4%, marking the slowest pace since the pandemic's onset three years ago. This slow growth reflects consumer pessimism towards the economy, fueled by rising interest rates, persistent inflation, and fears of a potential recession. This sentiment is echoed by the University of Michigan’s Consumer Sentiment Index (MCSI), which hit its lowest level since November in early May.

The Pulse of the Housing Market

The week ahead will also bring fresh updates on the housing market, starting with the NAHB’s Housing Market Index for May on Tuesday. Subsequent reports on April's housing starts and building permits by the Census Bureau on Wednesday will provide further insights into the dynamics of home construction and supply. Housing starts are expected to slightly decrease to 1.4 million units in April, down from 1.42 million in March. Further insights into the market will be provided on Thursday, when the National Association of Realtors (NAR) releases data on April's existing home sales. Sales are anticipated to fall to 4.3 million units, down from 4.44 million in March and significantly lower than the peak of 6.34 million units in January 2022.

International Economic Updates and the G7 Summit

Internationally, we can expect GDP readings from Japan and the eurozone, providing insights into the economic health of these regions. Canada's inflation data will also be released, adding another piece to the global economic puzzle.

Lastly, Hiroshima, Japan will host the 2023 Group of Seven (G7) summit starting on Friday. This international event gathers leaders from seven of the world's largest economies, serving as a vital platform for global economic discussion and collaboration.

Final Thoughts

Whether you're looking to gain a deeper understanding of the retail industry, the housing market, or the broader economic landscape, the week ahead promises a wealth of insights. By keeping a close eye on these key events and data releases, you'll be well-equipped to make informed decisions in a dynamic economic environment.


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