Market Preview: Earnings from Retailers TJX, Target and Gap, and Housing Market Numbers in Focus

The market went on a wild ride this week, with investors trying to navigate the crisis in Turkey combined with some conflicting economic numbers in the U.S. Productivity and retail sales were strong, but he housing market may be starting to weigh on the economy. A dearth of inventory, combined with a flight to safety in the bond market, is driving down mortgage rates. Home buyers are finding it difficult to find homes to purchase, which is starting to negatively impact businesses around the housing sector. Think home remodeling companies, real estate agents, and mortgage brokers.

As investors catch up over the weekend with what is happening in Turkey and whether Elon Musk violated securities laws via social media, analysts are preparing for earnings next week from Estee Lauder (EL), BHP Billiton (BBL), TJX Companies (TJX), Lowe’s (LOW), Target (TGT), Gap (GPS), and Foot Locker (FL). The wave of retail earnings should give some indication of how consumers are feeling about the economy, after some surprisingly low recent consumer sentiment numbers.

The economic calendar is clear on Monday, but Tuesday investors will examine the Redbook weekly retail sales numbers juxtaposed with the retail earnings coming next week. Wednesday the market will focus on new mortgage applications and existing home sales numbers to determine what impact the housing market is having on overall economic health. The housing focus will continue on Thursday when new home sales numbers are released along with the FHFA House Price Index. Last month the index was up .2 percent. Thursday also sees the release of weekly jobless claims, and kicks off the Jackson Hole Annual Economic Symposium. Friday the focus will be on durable goods orders and any news out of the Jackson Hole gathering.

When Estee Lauder releases earnings on Monday analysts are expecting a slowing of both top and bottomline growth. Oppenheimer recently put out a note explaining their long-term upbeat stance on the stock, but warned of near term headwinds. Investors will be interested in any prognostication from management for direction headed into Q3. Investors will also hear from Sasol (SSL) on Monday. The company ran into power outage issues last quarter which impacted production and earnings. The company projected the second half of the year would be much better than the first, with rising oil prices aiding the bottom line. Analysts will not want a repeat of last quarter’s excuse-filled conference call.

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