It will be a busy week in retail as major economies report monthly sales figures and chains including Walmart post financial results, giving investors a window into the health of the consumer.
The retail reports and a fresh batch of other economic data will offer investors another chance to grade the global economy and place their bets on whether central banks will remain on an accommodative path.
Here’s what to watch.
Retail
Retail sales for the US, UK and China are all due in the coming week. For the US and UK, economists expect the data to show a weaker month of July.
Economists polled by Thomson Reuters see a 0.2 per cent increase month-over-month in US retail sales, which would mark the weakest reading since February. US sales posted a 0.4 per cent rise in June backed by spending on vehicles.
UK retail sales surprised on the upside in June by growing 1 per cent, snapping a two-month streak of declines. But households are projected to have pulled back on spending once again, with economists looking for a 0.3 per cent decline.
In corporate earnings, US retailers Macy’s, Walmart and JCPenney, the struggling department store chain, will report quarterly results. Other earnings across retail include Coach and Kate Spade owner Tapestry and China’s Alibaba and JD.com.
Economic data
Beyond retail, there will be a host of other closely watched economic reports at a time when slower growth has encouraged central banks to take a dovish turn.
The main event will be Europe’s largest economy. Preliminary data on Germany’s gross domestic product for the second quarter will be published on Wednesday, and economists are bracing for a 0.1 drop.
If the projection holds true, Germany would follow the UK, the continent’s second-largest economy, in seeing its economy take a step back during the three months to June. On Friday, the Office for National Statistics said the UK economy contracted in the second quarter for the first time in almost seven years.
“With a near-term resolution to the trade dispute appearing unlikely, pressure on business confidence and investment looks set to continue, which will have a knock-on effect on the German economy,” Mark Haefele, global chief investment officer at UBS, wrote to clients.
Investors will also parse UK, US and French data on consumer prices; eurozone trade, economic growth and industrial production; US housing starts and consumer sentiment; Turkish industrial production; and a report on the Australian labour market.
Central banks in the US, Brazil, India, New Zealand, Thailand and the Philippines have cut interest rates recently, hoping to spur economic activity against the backdrop of US-China trade tensions and a murkier outlook. The next round of data could factor into future rate moves.
There’s one major rate decision on tap next week, from the central bank of Mexico on Thursday.
Investors will also be watching political developments in Italy, where the ruling League party filed a motion of no-confidence in prime minister Giuseppe Conte and its leader, Matteo Salvini, called for new elections. Yields on government debt rose sharply on the prospect of renewed political strife.
Saudi Aramco
The world’s largest oil company will hold its first-ever earnings call next week in advance of an expected initial public offering. Analysts expect the call, scheduled for Monday, to include an overview of Saudi Aramco’s finances for the first half of 2019.
Saudi energy minister Khalid al-Falih, who also serves as chairman of Saudi Aramco, has said the IPO will arrive in 2020 or 2021.
Saudi Aramco attracted $100bn in orders in its first international bond sale earlier this year, a record for an emerging market deal. Demand pushed the size of the deal to $12bn, up from $10bn.
