New data this week: Retailer reports and retail sales statistics

Principal Asset Management Chief Global Strategist Seema Shah stated last week's lower inflation data was greeted with applause in the stock market. However, analysts and some Fed members argued that the euphoria was premature, and plenty of other economic data will be released before the next Fed meeting on Dec. 14.

According to Andy Sparks, head of portfolio management research at MSCI, Chairman Jerome Powell has repeatedly stressed that the Fed does not attach too much importance to just one month's worth of data. Powell's comments continue to reflect the Fed's current thinking — a strong labor market continues to support high inflation, and the risk of doing too little still outweighs the risk of doing too much.

Strong retail sales data on Wednesday could halt the market rebound: the Bloomberg economists' consensus forecast of a 1.0% jump in retail sales would reflect that spending remains strong and consumption remains resilient. Investors might interpret this as a signal to Fed officials that they have more room to raise rates.

According to Bank of America, the expected jump in October sales is due to two factors: another round of Amazon Prime Day and related promotions in addition to the July event, and the rollout of one-time stimulus payments in California. Increased fuel costs due to higher prices also contributed to the expected increase.

Also among the economic data to be released Tuesday is the Producer Price Index (PPI), a measure of inflation on the manufacturing side of the economy. The PPI is expected to have declined last month. The week will also be full of data on the housing market, including data on homes under construction, building permits and sales of existing homes.

As for company reports, Walmart will kick off a big week of retailer reports when it reports before Tuesday's opening of trading. Analysts expect Walmart to benefit from more shopping for school, as well as increased spending among U.S. consumers tired of rising prices. At the same time, the results are expected to show pressure from inflation, rising interest rates and bloated inventories that have plagued many retailers.

Last quarter, Walmart CEO Doug McMillon said rising food and fuel inflation was putting pressure on consumer spending.

Other names on this week's list are Home Depot, Target, TJX, BJ's Wholesale, Gap, Kohl's, Macy's and Ross Stores.

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