As anxiety intensifies over rising inflation and the pace of economic growth, Wall Street is hungry for more information. This week, it’ll have a lot to chew on.
Not only will investors receive reports on consumer prices and the housing market in the upcoming days, they’ll also be hit by a cascade of financial results from companies ranging from the financial, technology and homebuilding sectors to the manufacturing, consumer goods and pharmaceutical industries. The earnings reports should give investors more clues to their questions about U.S. growth: Is it expanding so fast that it will prompt a rate hike from the Federal Reserve? Slowly enough to incite a rate cut? Or so feebly that the economy might eventually slip into recession?
Investors are crossing their fingers for slow growth and a rate cut later in the year, a move that would likely ramp up consumer spending — which so far has remained resilient given the slow housing market and inflation that the Fed calls “uncomfortably high.” On Monday, the market will see if spending is still strong when the Commerce Department releases its March retail sales report. Analysts predict sales will rise by about 0.4 percent, up from an anemic 0.1 percent rise in February.
Another economic report that will draw attention next week is the Labor Department’s March Consumer Price Index, and the accompanying core figure that strips out energy and food prices. The report, released Tuesday, is considered an even more important gauge of inflation than the Producer Price Index, which on Friday came in flat and calmed some jitters about inflation getting out of control. Analysts are anticipating the CPI to register a 0.6 percent rise, and the core index to climb 0.2 percent.
For more than 3 1/2 years, earnings for companies in the Standard & Poor’s 500 index grew at a double-digit pace. That growth slowed late last year, and analysts predict it cooled even more in the first three months of the year. S&P’s recent estimate of first-quarter earnings growth is 3.8 percent.
On Monday, Citigroup is expected to release earnings of $1.08 a share. The bank closed at $51.60 Friday, after trading in a 52-week range of $46.22 to $57.
Tech leaders Intel Corp. and International Business Machines Corp. release results Tuesday. The market predicts Intel will post profit of 22 cents a share. Intel closed Friday at $20.46, after trading in a 52-week range of $16.75 to $22.50.
IBM is expected to report earnings of $1.21 a share; the stock closed at $94.93 Friday, in the upper end of its 52-week range of $72.73 to $100.90.
Internet search company Google Inc. and financial powerhouse Merrill Lynch & Co. release their quarterly earnings on Thursday. Google is expected to post a profit of $3.04 a share; its stock closed Friday at $466.29, after trading in a 52-week range of $360.57 to $513.
Analysts are forecasting profit of $1.94 a share for Merrill, which closed Friday at $86.28, after trading in a 52-week range of $64.58 to $98.68.
This Friday brings financial results from Caterpillar Inc. The market is predicting the manufacturer will post earnings of $1.09 a share. The company closed Friday at $66.79. It has traded in a 52-week range of $57.98 to $82.03.
Investors Monday will read the New York Empire State index of the region’s manufacturing activity in April. The market is expecting stronger expansion than in March. Also Monday, the Commerce Department reports on February business inventories, and the National Association of Home Builders releases its April housing index.
Tuesday brings government data on March industrial production and capacity utilization, as well as March housing starts and building permits — the market is expecting all these reports to come in slightly weaker than in February.
Thursday, the Conference Board releases its March leading economic indicators, which analysts expect to show improvement from February. Also, the Philadelphia Fed will report on regional manufacturing activity. Analysts expect the index to indicate stronger expansion than a month ago.
Additionally, this week will bring speeches from Fed officials Charles Plosser, Timothy Geithner, Janet Yellen, Frederic Mishkin and William Poole.