For Immediate Release
Chicago, IL – August 16, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Walmart WMT, Target TGT, Home Depot HD, Lowe's LOW and SPDR S&P homebuilders ETF XHB.
Here are highlights from Monday’s Analyst Blog:
Big Box U.S. Retail Reports: Global Week Ahead
In the Global Week Ahead, big box U.S. retail earnings update stock traders.
The monster U.S. retailers will reveal how consumers are coping with sky-high inflation.
Across the Atlantic Pond, macro data updates about the health of the sickly U.K. economy. Power supply problems — and drought — will continue to plague Europe.
The central bank spotlight falls on the small guys: New Zealand and Norway.
Next are Reuters' five world market themes, reordered for equity traders.
(1) Big-box U.S. retailers report Q2 earnings. They also give us key outlooks.
Investors will be looking out for what the biggest U.S. retailers have to say on rising prices, after a rare bit of good news on inflation in the past week.
Walmart and Target, which report second-quarter earnings on Tuesday and Wednesday, respectively, have recently cut forecasts and warned inflation was squeezing margins and forcing consumers to reduce discretionary purchases.
Retailers' outlooks for consumer behavior will be key for investors looking to assess the pace of inflation. U.S. consumer prices were unchanged last month, the largest month-on-month deceleration of price increases since 1973.
Other big retailers reporting include Home Depot on Tuesday and Lowe's the following day, while U.S. retail sales data, set for Wednesday, will give a broad picture of how the consumer is faring.
(2) U.S. housing starts on Tuesday. U.S. existing home sales on Thursday.
The cooling U.S. housing market gets a couple of gut checks in the coming week. July data on housing starts is due on Tuesday, after new U.S. home-building activity fell to a nine-month low in June.
Data on U.S. existing home sales for last month is released on Thursday after such sales fell for a fifth straight month in June to the lowest level in two years.
However, a moderation in mortgage rates could underpin support for housing, with the 30-year rate trending lower since mid-June after doubling in 2022.
The SPDR S&P homebuilders ETF has rebounded +25% since mid-June, after getting pummeled in the first half of the year.
(3) Europe faces soaring electricity prices and critically low water levels.
Already reeling from gas supply shortages, Europe faces soaring electricity prices and possible power cuts, as blistering summer weather sends water levels to critically low levels in rivers, lakes and reservoirs.
Along the German stretch of the Rhine, barges can only sail with partial loads of coal, threatening output at power plants. Norway, experiencing low rainfall after a winter with relatively little snow, may cap hydropower exports to preserve its reservoirs.
As a result, German baseload 2023 contract, Europe's benchmark, has hit record highs, almost doubling since mid-June.
(4) A raft of U.K. macro data arrives.
With the Bank of England's dire warnings still ringing in their ears, traders can expect no cheer from U.K. upcoming data.
British consumer inflation figures for July due Wednesday will likely top June's +9.4% print, heading towards a +13.3% peak forecast for October.
The BoE predicts a long and deep recession, evidence of which may come from July retail sales data out on Aug. 19th. Sales slumped -5.8% year-on-year in June, while consumer confidence is languishing at its lowest since 1974.
The U.K. labor market has so far been robust; almost 300,000 jobs were added in the quarter to May, leaving unemployment at just 3.8%.
However, adjusted for inflation, pay excluding bonuses fell by the most since records began in 2001. Another such reading may emerge on Tuesday, just as rail workers prepare for more of the strikes that have paralyzed public transport this summer.
(5) Small central banks show us their updated monetary policy hands.
Tight labor markets in New Zealand and Australia are making it difficult for both the inscrutable Reserve Bank of New Zealand and the more vocal Reserve Bank of Australia to find a middle ground on rate hikes.
Investors are certain RBNZ Governor Adrian Orr is not yet ready to compromise on inflation and will raise rates by another 50 basis points on Wednesday, notwithstanding the slight easing of inflation expectations and cooling property prices.
What the RBNZ signals about wage growth could sway current expectations for a peak policy rate of 4% early next year.
Second-quarter wages data in Australia is due the same day, and anecdotal signs suggest the tightest labor market in five decades also will set the RBA up for 50 bps next month, and for 225 bps of tightening in four months – a pace unseen since the 1990s.
Norway's central bank, meanwhile, is expected to hike rates when it meets on Thursday. It raised rates by 50 bps in June and some economists expect big hikes in August and September.
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