A combination of U.S. and Chinese tariffs going into effect, and an expected rate hike later this week, drove the DJIA lower Monday. The Nasdaq held onto a slight gain following the introduction of the new S&P Communications Services sector. Trade and interest rates will continue to be the focus of the markets midweek. Any positive news on the trade front could send the markets higher, as an interest rate hike is baked in at this point. Markets are not expecting any surprises from the Fed on Wednesday as the economic numbers continue to be strong. Any deviation from the script by Chairman Powell would likely have a major impact.    

Tuesday the market will focus on Nike (NKE) as the company reports earnings for the first time following the airing of their latest advertising campaign, which includes Colin Kaepernick. In the current political climate many companies have chosen to distance themselves from controversial issues fearing a boycott of their products. Though Kaepernick is just one element of the ad campaign, analysts will be interested to hear how the company has performed since the campaign began, and what the company’s strategy was as they contemplated the pros and cons. Also reporting on Tuesday is Cintas (CTAS). The uniform rental company has been riding the surging economy and is up over 35% so far in 2018. Investors are looking for an earnings beat, and for some insight into what the company sees near term as the economy appears to be maintaining its positive trend.

Tuesday also kicks off the first day of a two day Fed meeting. Economic data released on Tuesday includes the Redbook retail sales numbers, the Case-Schiller home price index, the FHFA house price index, and consumer confidence. The confidence number is expected to fall slightly in September to 131.7 after a big increase in the August number. Wednesday will begin with mortgage applications and new home sales numbers, but everyone will be focused on the 2pm Fed announcement on interest rates. The Fed is widely expected to raise rates a quarter point. This announcement also includes a press conference by Fed Chair Powell. Markets will be listening closely for any clues of future rate increases.

Reporting earnings on Wednesday before the open is CarMax (KMX). The car retailer’s comparable store sales have been on a positive trend the past few quarters, but both numbers were on the negative side of the ledger. Analysts would like to see a return to positive comp sales, and ideally the company can show improvement on the bottom line as well. Joining CarMax is Bed, Bath & Beyond (BBBY). The home goods retailer has seen earnings drop for several years, and is facing stiff competition from Amazon and Walmart. Investors are looking to see if strong numbers from companies like Target (TGT) are translating to the discount retailer. If the company can produce an increase in margins we may see a bump in the stock, but analysts aren’t expecting much from the company as evidenced by the 13% decline so far this year.

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