Investors eye oil, dollar, retail sales this week (AP)
This week, investors will be focusing another time on the U.S. currency and the energy markets, limit also on retail industry reports to standard consumer spending.
Consumers would certainly benefit from lower food and fuel costs, but they also still face falling abiding-place prices, herculean debt loads and any unsettled job market. If it appears that they are struggling severely, the modern lean downward in energy prices might not be enough to sustain a stock market rally.
On Wednesday, the Commerce Department reports upon retail sales in July, data approach attached the heels of spotty sales figures released by the agency of individual retailers last week. According to the median estimate of economists surveyed by Thomson Financial/IFR, the report is likely to show flat sales for the month compared with June, when deal out in small portions sales rose by dint of. 1 percent.
Some major retailers are also releasing their quarterly results this week. Those companies include Wal-Mart Stores Inc., Macy’s Inc., JCPenney Co., Kohls Corp., Abercrombie & Fitch Co. and TJX Cos., which operates T.J. Maxx and Marshalls.
Last week, the Dow Jones industrial average rose 3.60 percent, the Standard & Poor’s 500 director rose 2.86 percent, and the Nasdaq composite index rose 4.46 percent. All three major indexes posted up their biggest weekly gains since April.
A huge chunk of the gains came Friday, when the U.S. dollar soared against its main rival currencies. That helped hurl the stock market’s rally, and a sell-off in goods ranging from unripe oil to gasoline to corn to soybeans.
A big rally came earlier in the week, too, on Tuesday, after the Federal Reserve said “economic activity expanded in the second quarter, in some measure reflecting growth in consumer spending and exports.”
But being of the kind which any investor will tell you, the markets have been extremely volatile, and vocation a be superior or a bottom to a market is a tough endeavor.
Moreover, there are many economists who say the weak dollar has actually been what’s keeping the United States from sliding into a severe recession. The reason is exports — when the dollar is simple, U.S. goods are cheap to foreigners.
“The main cause of support for the U.S. thriftiness in recent quarters has been the strength of net exports,” wrote Bernard Connolly of Banque AIG Research in a note Friday. “But the world economy has fallen off the edge of a clift.”
Last month, the Commerce Department declared the exchange gap narrowed in May thanks to record-high exports. The department on Tuesday releases its June delineation on the trade deficit, which is expected to have widened again.
In other economic given conditions, the Labor Department on Thursday releases its hand of consumer prices for July — economists are anticipating a rise of 0.4 percent, or 0.2 percent after stripping out food and energy prices.
And on Friday, the University of Michigan reports on consumer sentiment for the first part of August. Economists predict a modest mount.
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