Though earnings season is winding down, there are still a few market-moving companies to report next week. Home Depot (HD), Cisco Systems (CSCO), Walmart (WMT) and Deere (DE) all will be reporting earnings. From these reports investors will interpret data on consumer spending, the health of the tech rally, and how U.S. companies are being treated internationally as the tariff standoffs continue. Most expect good numbers from these stalwarts as reporting on second quarter earnings winds down.   

While this week’s economic calendar was light, next week brings a bevy of economic numbers for analysts to chew on. We’ll start off lite with nothing Monday and only import and export prices on Tuesday. But, hold onto your economic hats as Wednesday brings new mortgage applications, retail sales, the Empire State manufacturing survey, productivity and unit costs, industrial production, and business inventories. Needless to say there will be a plethora of analysts spouting opinions as the economic numbers fly. Thursday we’ll get housing starts and jobless claims, and we’ll wrap up the week with consumer sentiment on Friday

Monday investors will digest earnings from foodservice supplier Sysco (SYY). Analysts are looking for Sysco to continue its winning ways, with the stock up over 40% the past year. The main question for management will be how they are planning on handling rising commodity costs going forward. Also reporting Monday is JinkoSolar (JKS). Named the number one supplier of solar panels in China by Fortune, the stock has been in a steady decline. Analysts will want to know if rising oil prices are improving the prospects for solar. But, there will also be questions around U.S. tariffs on solar products and how that will impact Jinko.

With no economic numbers Monday, the market may also focus on earnings from YY, Inc. (YY). Fortnite has been blowing up streaming services like Twitch, a subsidiary of Amazon (AMZN). Analysts  will be eager to hear how the Chinese streaming service is faring, and how they perceive the competitive landscape in this evolving sector.

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Thursday morning investors will hear earnings from Norwegian Cruise Lines (NCLH). The company preannounced a strong quarter last month, so analysts will be looking for a positive outlook from the company. Cruise industry stocks have been under pressure this year as investors fear too many ships are coming online outstripping demand. In the afternoon investors will hear from Dropbox (DBX). The storage company recently increased the storage size available to business customers without raising prices. Analysts are generally positive on the stock which went public earlier this year, spiked up 50%, and then traded back to its IPO price.

Thursday will also bring Jobless Claims which have been hovering at the lowest level seen in decades. Investors will be looking for any hint of an unexpected trend change. The Producer Price Index for July will also be released. The expectation is for a 0.3 percent increase, after increases in May and June were attributed to trade services and trade tariff expectations. Federal Reserve Bank of Chicago President Charles Evans will also be speaking Thursday morning. Fed watchers will be parsing Mr. Evan’s speech for any hint that he is moving even further into the camp that believes interest rates must rise.

The earnings calendar is relatively light on Friday, as earnings season is in its final weeks. Investors will hear from Applied Industrial Technologies (AIT) and Ruth’s Hospitality Group (RUTH). Analysts are expecting Applied to increase earnings almost 30% year-over-year. The almost 100 year old industrial supply company should give some color on general industrial health in the U.S. Ruth’s, owner of Ruth’s Chris Steak House, will also announce earnings on Friday. The stock has been on an upward trajectory for the past year. Investors will be waiting to hear of any changes from incoming CEO Cheryl Henry. Ms. Henry has been the President and Chief Operating Officer of the company, and is replacing outgoing CEO Michael P. O’Donnell.

On the economic front, Friday’s conversation will be around the Consumer Price Index numbers released Friday morning. Economists are expecting a 0.2 percent gain in July, following a 0.1 percent gain in June. The number is closely watched as a gauge of inflation, and will feed the conversation around whether the Fed is raising interest rates too quickly. The Baker-Hughes Rig Count numbers will be released at 1pm. Investors will be watching this number closely to see if the rig count is rising and if that number is high enough to slow the steady increase in the price of oil. The prior week’s numbers stood at 1,267 active rigs in North America.

Tuesday investors will digest earnings from Walt Disney Company (DIS) and Discovery Communications (DISCA). Investors will be looking for an update from Disney on its upcoming purchase of $71B of Twenty-First Century Fox (FOXA) assets (FOXA reports earnings Wednesday). Analysts will also want an update on the new Disney streaming service, as the competition in that market is heating up. Discovery stock is up substantially since late last year, but has traded in a range since completing the acquisition of Scripps in March. Analysts are looking for year-over-year earnings growth of 23.5% after a 43% increase last quarter.

Tuesday also brings the release of the Labor Department’s JOLT report. The Job Openings and Labor Turnover survey provides data on both new job openings being created and employees quitting their current jobs. Both numbers are expected to rise as employees become more confident in the employment market and their prospects for higher wages.

CVS Health Corp. (CVS) and Booking Holdings (BKNG) will report earnings on Wednesday. CVS is a company in the midst of a squall, if not a small hurricane. The company faces slowing revenue, its long-term care Omnicare business is not performing as expected, and it is in the middle of an acquisition of Aetna. CEO Larry Merlo will need to be an expert juggler on the conference call to manage the wide range of issues. Booking, owner of Priceline.com, had a great run after its earnings release in late February, but has slowly faded since then. Analysts will be looking for continued growth in listings, and a possible double digit increase in room nights booked.

The MBA Mortgage Applications numbers will be released on Wednesday. The index measures applications at mortgage lenders and is a leading indicator for single-family home sales and construction. The number will be very closely watched as recent increases in interest rates have driven mortgage rates to their highest level in two months.

China announced Friday it will impose tariffs on $60B in American goods if President Trump follows through with his proposed tariffs on $200B in Chinese goods. Next week will likely bring more trade barbs, and maybe some positive news. Mexico’s Economy Minister says there is a good chance Mexico and the U.S. will resolve NAFTA issues next week. Canada is also getting close to rejoining NAFTA talks.

Although earnings season is waning as we head into the first full week of August, next week still brings numbers from some heavy hitters. Slated to report earnings next week are Marriott (MAR), Disney (DIS), CVS (CVS), Viacom (VIAB), and Newscorp (NWSA). Economic numbers are light heading into the traditional vacation month, but we will get Jobless Claims and the Consumer Price Index (CPI) numbers late in the week.

Monday morning Newell Brands (NWL) delivers earnings followed by Marriott (MAR) after the close. Newell has been range-bound this year. The stock took a major hit after announcing earnings late in 2017. With margins shrinking and commodity prices rising, little is expected from the maker of Rubbermaid. Marriott has fallen off since its earnings report in May, perhaps partly because its highest growth last quarter was in its “Greater China” business. Analysts will be watching closely for any signs the recent chilly relationship between China and the U.S. is impacting that growth.

The latest numbers from the TD Ameritrade’s Investors Movement Index (IMX) will be released Monday at 12:30. The index, a sample of 6 million retail investor accounts, gives a quantitative look into recent investor behavior. The index provides information on their mood, sentiment and investing behavior. Analysts will parse the number to determine whether recent market and trade activity has spooked investors.

August may have arrived with the Fed, but investors can’t leave for the month just yet. As expected, the Fed left rates unchanged Wednesday afternoon, but the first paragraph of the Open Market Committee statement used some form of the word “strong” four separate times. The consensus is that Chairman Powell wants to leave no room for ambiguity: The Fed will raise rates again in September at its next meeting.

More earnings are on tap for Thursday as investors parse earnings from CBS (CBS) and DowDuPont (DWDP). CBS will draw more attention than usual with the recent sexual misconduct allegations against CEO Les Moonves. Mr. Moonves is expected to take questions from analysts on the company’s conference call. Analysts will be watching DowDuPont to see if revenue can keep pace with earnings at the chemical maker. Recent reports indicate that cost cutting is more responsible for earnings than increasing revenue. Investors would like to see revenue growth more in line with the industry average.

As for economic numbers, the market will parse the Jobless Claims report on Thursday morning. There will likely be a great deal of conversation about how “strong” the numbers are after the Fed Statement. Factory Orders will also be released at 10am. Friday attention will turn back to trade as the U.S. Trade Deficit numbers are released. The deficit will widen, as goods numbers, already released, showed the deficit growing. The question will be how wide the deficit is when services are added.

Friday will also see earnings from Kraft Heinz (KHC) and Dish Networks (DISH). Sales at Kraft Heinz fell over 3% in the U.S. last quarter. Analysts are looking for another decline this quarter, so any positive news could move the stock up. Dish investors will be looking for any news on progress toward building a 5G wireless network. The company has billions of dollars in spectrum it purchased several years ago from bankrupt sellers. The spectrum will be taken from the company by the FCC in a little over a year-and-a-half from now if the company does not show it is being used.

Neither the strong GDP number on Friday, nor the rosy outlook from Caterpillar Monday morning could move the market upward Monday. Facebook (FB) hit new post-earnings lows and Netflix (NFLX) fell almost 6% Monday alone. Many analysts are talking about a possible sector rotation out of growth stocks and into value.

Tuesday and Wednesday may provide some clarity when investors react to Apple (AAPL) earnings after the close. Analysts are not expecting any earth-shattering news from Apple. Charter Communications (CHTR) will report Tuesday morning. Analysts are looking for signs that the spoils from their Time Warner Acquisition will begin showing up in the second half of this year.

Wednesday Automatic Data Processing (ADP), the giant payroll processing company, will give the market more color on jobs. The company reports earnings, and the ADP employment report is released at 8:15am. Everyone will be listening for what Elon Musk has to say Wednesday afternoon when Tesla reports. The company was questioned recently for renegotiating contracts with suppliers. Some saw this as a sign the company would not make sales projections.

The economic calendar is packed Tuesday and Wednesday. In addition to the jobs numbers, Tuesday brings Consumer Confidence. Wednesday morning sees the release of two manufacturing index numbers. Wednesday afternoon the FOMC policy statement will be released. Analysts do not expect the Fed to raise rates. But, if the strong GDP number jolts the Fed to take additional action, the market will likely respond negatively.

For the week of July 30:

After the largest one-day loss of capital by a single stock in history last week with Facebook (FB), investors will be understandably nervous going into the end of earnings season. Monday morning will kick-off with a mix of industrials and tech as Caterpillar (CAT), Seagate (STX) and KLA Tencor (KLAC) report earnings. Analysts are expecting continuing strong numbers from CAT based on continued economic strength and rising commodity prices. Though doing well on the year, Seagate fell sharply after last quarter’s earnings. Investors will be looking for any news on a move to solid state technology many believe the company must make.

The GDP number Friday was strong, coming in at 4.1% growth, but that was not enough to keep the market in positive territory as the weekend approached. Consensus is the large number was due to an avoidance of impending trade tariffs, ant that first-half growth has stolen from second-half numbers. Monday the economic calendar brings a continuation of housing data as Pending Home Sales numbers are released. Those numbers will be followed closely by the Dallas Fed Manufacturing Survey.

Tuesday, the last day of July, we’ll get early numbers from Proctor and Gamble (PG) and Pfizer (PFE) in the morning. Facing “reduced competitor pricing” P&G tanked after earnings last quarter. The stock has regained that loss, but still sits well below where it was at the beginning of 2018.  Pfizer announced a major reorg earlier in the month. Investors will be looking for more color on how this will impact the company moving forward.

Early earnings numbers, as well as the Case-Shiller Home Price Index and Consumer Confidence reports will drive pre-lunch trading. But, by mid-day the market’s attention will turn to earnings from Apple (AAPL), which are due after the close. This is the least interesting quarter annually for Apple, with holiday sales behind it and next year’s lineup yet to hit stores. But, with the impact of the Facebook numbers fresh in their minds, investors may not be willing to hold AAPL shares up going into the close on Tuesday.

Earnings, earnings and more earnings will drive investor sentiment today and Wednesday. Several stocks may get attention as “canaries in the coal mine” for what impact the trade wars are beginning to have. Not normally a bellwether, Canadian National Railway (CNI) may merit more attention than usual today. Investors will be listening to conference call commentary for sentiment changes due to recent tariffs.

Color on international sales will also be front-and-center when Harley-Davidson (HOG) reports today and Coca-Cola (KO) reports tomorrow. Harley has recently come under the ire of President Trump for moving some production to the EU to offset tariffs. Coke may also give some indication of whether foreign sentiment toward the trade wars is beginning to weigh on earnings.

Much of Wednesday will be devoted to Facebook (FB). Investors will want even more assurances of data safety, even as the company blankets airways with advertisements meant to assuage FB users. If Facebook can blow away ad revenue numbers, which they’ve been trying to jolt with their latest algorithm updates, it will go a long way toward appeasing investors.

The rest of Wednesday will see earnings from heavy hitters Visa (V) in the financial sector, General Dynamics (GD) and Northrop Grumman (NOC) in defense, and Boeing (BA) in aviation.

And finally on the earnings front, investors will be looking to see if Boeing can continue to benefit from increased passenger jet orders without facing headwinds caused by the potential for trade wars.  Earlier this month, Boeing announced increased orders for its 737 and 787 but decreased demand for the 777.

The economic calendar for Tuesday and Wednesday is relatively light, allowing the market to remain focused on earnings. Most notable are mortgage applications and new home sales released Wednesday morning. A low housing supply and increased prices slowed sales in the first half of the year. But, Freddie Mac expects conditions to improve the rest of the year and is predicting 2.5% growth in combined new and existing sales.

 

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