retailer earnings, home sales, FOMC meeting minutes, PCE prices
Next week will be a holiday-shortened one, with U.S. markets closed on Monday.
Earnings season continues next week with reports from major retailers including Walmart and Home Depot. Other companies reporting next week include Nvidia, Alibaba, Coinbase, and Moderna, among others.
We’ll receive the latest updates on the housing market next week, including new and existing home sales for January.
On Wednesday, the Federal Reserve will release meeting minutes from the latest FOMC meeting, which could provide more insights into the future trajectory of interest rates.
On Friday, the Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred gauge of inflation—for January.
Major Retailers Report Earnings
Earnings season continues next week with reports from major retailers including Walmart and Home Depot. Walmart, the largest retailer in the U.S. by revenue, is expected to post earnings per share (EPS) of $1.52, which would mark a 6% decline and the third consecutive quarterly decline in EPS. Sales are projected to rise about 5% to just under $160 billion.
Of the S&P 500 companies that have reported earnings so far, 69% have exceeded their EPS expectations, which is below the five-year average of 77% and the 10-year average of 73%, according to research by FactSet.1 In total, reported earnings for S&P 500 companies have exceeded projections by just 1.1%, well below the five-year average of 8.6% and 10-year average of 6.4%.
The Latest Home Sales Figures
We’ll receive more updates on the housing market next week, including new and existing home sales for January. Existing home sales are projected to have rebounded last month to 4.1 million units, up slightly from 4.02 million in December. This would mark the first increase in sales since January of last year, when they totaled 6.49 million.
New home sales are also projected to have risen slightly to 620,000, up from 616,000 in December. Home sales were likely boosted last month by falling mortgage rates, which fell from 20-year highs hit late last year. The average rate on a 30-year fixed-rate mortgage fell to 6.09% in early February, after peaking above 7% in late October.
The Fed's Preferred Gauge of Inflation
On Friday, the Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred gauge of inflation—for January. The PCE price index is projected to have risen 0.3% last month, accelerating from a 0.1% gain in each of the previous two months. Prices likely increased 4.8% on an annual basis, down slightly from 5% in December.
Core prices, which exclude volatile food and energy costs, are projected to have risen 0.5% last month, accelerating from 0.3% in December. Year-over-year, the core index likely decelerated to 4.3% from 4.4% in December and compared to a peak rate of 5.4% in February of last year.
The PCE Price Index is the Fed’s preferred gauge of inflation as it more closely tracks spending decisions by U.S. consumers. The basket of goods and services comprising the index is updated more frequently than the Consumer Price Index (CPI), which uses a fixed basket of goods and services.