The consumer will be in the spotlight next week as investors enter the tail end of earnings season and await some major macroeconomic reports. So far, only 14% of S&P 500 companies have reported earnings results. However, investors are set to get a flood of reports next week when they see results from about 20% of the index, with 30% more coming next week. As one strategist noted, Wall Street is about to get a picture of the economy from more than half of the broad market index. The results could give investors a key piece of information. Now that it looks like inflation is actually coming down from its highs, many have turned their attention to the consumer to see how soon the Federal Reserve cuts interest rates to avoid a possible rupture in the economy. With some recent signs of slowing growth, corporate results and commentary could give investors a clearer picture of how the consumer is holding up. For investors, this could determine what happens next for the markets. This week, the S&P 500 fell as investors turned away from large-cap tech leaders to this year’s market laggards, such as small caps. On Friday, Nvidia posted losses of more than 8% for the week, while the small-cap Russell 2000 outperformed the three major indexes, rising 1.7%. .RUT 5D mountain Russell 2000 Investors are looking at whether these moves are a sign of a trade-off that could broadly lift the market or a sign of a correction around the corner as the technology sector anchors. Some expect stocks to be due for near-term volatility, but they may rally toward the end of the year. “We’re probably due a break from equities and probably going sideways,” said Terry Sandven, chief equity strategist at US Bank Asset Management Group. “That’s not to say there’s a bear market. It’s just to say we should probably have a little bit of support and fill until we get closer to October and then have visibility into the new year.” On Friday, the S&P 500 posted its worst week since April, falling nearly 2%. The Nasdaq Composite fell more than 3%. The Dow Jones Industrial Average was the only one to close the week with gains, up 0.7%. The period of profits and gains is starting strongly. Of the 14% of S&P 500 companies that have reported results, about 82% have posted positive surprises. Bank results — which investors continued to scrutinize after last year’s crisis at regional institutions — have mostly been over, with the companies themselves emerging largely unscathed. However, more consumer-related companies are reporting next week, including some notable names that could provide insight into the housing sector. Results from commercial real estate firm CBRE are on deck, as are paint and coatings maker Sherwin-Williams and appliance maker Whirlpool. These names could shed light on a critical component of inflation that is an important part of the consumer price index and the personal consumption expenditure report. While housing has recently started to show some signs of cooling, investors would like further confirmation that it is retreating from its highs. “It’s an important element of household value and consumer status,” said Charles Ashley, portfolio manager at Catalyst Funds. “Having a strong housing market is important for the economy in general, and I also think we need to read the tea leaves on what the Fed is going to do next.” Credit card company Visa will report next week after results from American Express this week suggested inflationary pressures have reached the higher-end consumer. Also on deck next week are some early reports from the Magnificent Seven. On Tuesday, Google parent Alphabet and Tesla will give investors some early information on the AI trade ahead of the bulk of reports coming later this month. Read Inflation Insights Wall Street Economics is also in for a full batch of macroeconomic reports next week, with some key economic growth and inflation data that could help investors think about how the Fed could bring both into better balance while following a soft landing for the economy. “I think the Fed needs to be mindful of the possibility that the economy could deteriorate faster than everyone expects right now,” Ashley said. “We’ve already seen some softening in a little bit of consumer, a little bit of housing. And so if the Fed takes too long to act, that could accelerate faster than I think the market expects.” A preliminary Commerce Department reading of second-quarter gross domestic product is expected on Thursday. It is expected to post an annual gain of 1.9%, up from 1.4% in the first quarter, according to economists polled by FactSet. June’s personal consumption expenditure price index, which is the Fed’s preferred inflation gauge, is due out on Friday. It is expected to show a monthly gain of 0.1% in the core reading, roughly in line with the previous month’s reading, and 2.5% from a year ago, down 0.1 percentage point from May. The all-data reading is forecast to increase by 0.1% monthly and 2.4% annually. The Fed is targeting 2% inflation. Elsewhere, existing data for June home sales is also expected to be released early in the week. Week Ahead Calendar All times ET. Monday July 22 8:30 am Chicago Fed National Activity Index (June) Earnings: Verizon Tuesday, July 23 10 am. Sales of existing homes (June) 10 a.m. Richmond Fed Index (July) Gains: Visa , Enphase Energy , Capital One Financial , Texas Instruments , Tesla , Alphabet , Freeport-McMoRan , Lockheed Martin , Sherwin-Williams , Comcast , Coca-Cola , Kimberly-Clark , General Motors , United Parcel Service , Philip Morris International , GE Aerospace Wednesday July 24 9:45 am July) 9:45 am Markit PMI Manufacturing preliminary (July) 9:45 am Markit PMI Services preliminary (July) Earnings: O’Reilly Automotive , Chipotle Mexican Grill , International Business Machines , Las Vegas Sands , Ford Motor , Align Technology , Lamb Weston , NextEra Energy , AT & T , GE Vernova Thursday, July 25 8:30 a.m. Continuing Jobless Claims (07/13) 8:30 AM Initial Claims (07/20) 8:30am Wholesale stocks preliminary (June) 11 am. Kansas City Fed Manufacturing Index (July) Gains: American Airlines , CBRE , Valero Energy , Hasbro , Tractor Supply , RTX , Southwest Gr. Honeywell International , AbbVie , PG & E , Norfolk Southern Friday, July 26 8:30 a.m. Personal Consumption Expenditure Price Index (June) 8:30 am Personal Income (June) 10am Michigan Sentiment final (July) Earnings: T. Rowe Price Group , Bristol-Myers Squibb , Colgate-Palmolive , 3M
