Market Preview: Looking for More Good Economic Numbers, Earnings from Walmart and Deere

In a tumultuous week for the markets amid tit-for-tat tariff actions by the U.S. and Turkey, economic numbers released so far this week have been quite good. Retail sales numbers exceeded expectations with consumers more freely opening their wallets. Productivity numbers also blew away estimates. The 2.9% rise in productivity was the largest quarterly gain in three years. And the Empire State Manufacturing Index rose 3 points to 25.6, when economists had expected a decline to 20. When the market turned briefly turned away from the Turkey crisis on Tuesday, the economic numbers actually had the indexes moving up.

Thursday morning investors will get earnings from Walmart (WMT) and then Nvidia (NVDA) reports after the close. Analysts are expecting Walmart to report growing revenue, but that growth is coming at the cost of additional investments in their e-commerce business. Keeping pace with rival Amazon is more expensive than management predicted last year. With low margin groceries a staple of Walmart’s online business, it is difficult for earnings to outstrip investment costs. Although the growth rate in Nvidia’s largest market, gaming, appears to be slowing slightly, and cryptocurrency has taken a beating, analysts still expect the company to report a good Q2. With a new chip set architecture just announced, and growth in the datacenter business accelerating, the company appears to be on pace for a good second half of the year.

The economic calendar for Thursday and Friday doesn’t give investors much downtime after the onslaught of releases Tuesday and Wednesday. Thursday brings housing starts, jobless claims, and the Philly Fed Business Survey, all before the market opens. Economists expect a slightly higher housing starts number in July after an unexpected sharp decline in June. Friday investors will examine consumer sentiment and e-commerce retail numbers. They’ll also get a look at the index of leading economic indicators. The index was up .2 percent in June, but analysts expect a pick-up in the second half of the year, and July is predicted to jump .4 percent to kick things off.

Deere (DE)  will report earnings on Friday. The company disappointed analysts last quarter due to rising costs and the early impact of trade tariffs. J.P. Morgan recently cut its price target on the farm equipment maker, lowering expectations further for Q2. Investors will be looking for further impact from trade tariffs, which may be delaying purchases of equipment by farmers.

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