This week is all about retail, especially for investors who are hoping to get a better assessment of the U.S. economy. Kicking off the festivities ...
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| | Top News  Getty Images This week is all about retail, especially for investors who are hoping to get a better assessment of the U.S. economy. Kicking off the festivities today will be earnings from Home Depot (HD), with comparable sales shedding a spotlight on the current spending habits of the American consumer. Walmart (WMT) will also report quarterly results on Thursday, the same day that July's retail sales data will be published.
Speaking of macro: Nervousness has been present in markets since July's weak jobs report that highlighted rising unemployment. It helped volatility spike last week, and while stocks have since recovered from a major selloff, the situation remains fragile. Fears could reignite if there are further hints of a slowdown, especially since consumer spending accounts for more than two-thirds of the economy, but the figures could also provide reassurance if the numbers go the other way.
The same situation will play out tomorrow. A hot consumer price index report could push stagflation fears back into the market and even cause a resurgence in recession worries. On the other hand, easing price pressures would calm investor nerves and may provide a relief rally, especially if positive retail earnings heat things back up. A report by the New York Fed yesterday also showed the three-year inflation consumer outlook hitting a record low, which will be yet another factor in expectations about whether the Fed will embark on a rate cut cycle as soon as next month.
SA commentary: "We may see more volatility in the days ahead, as bears attempt to sway investor sentiment by wrangling over how each economic report is either inflationary or recessionary, but they are likely to be failed attempts to breathe life into a narrative that has fallen flat for nearly two years now," wrote Investing Group Leader Lawrence Fuller. "If you forecast a recession or an end to the bull market, you will eventually be right, as both are natural stages of each economic and market cycle. If you are early by a year or more, then you are not doing anyone any favors, including yourself." | | Featured  Want to get more from investing efforts? Take our world-class Premium service for a test drive. Sign up now, and you can try all of Premium's powerful tools and resources: - Our proprietary Quant ratings, plus ratings from Wall St. and analysts on Seeking Alpha
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Past performance is no guarantee of future results. Any content and tools on the platform are offered for information purposes only. Seeking Alpha does not take account of your objectives or financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. | | Consumer As activism envelops Starbucks ( SBUX), the coffee chain is apparently weighing whether to add Elliott Investment Management's Jesse Cohn to the board in a potential settlement. Nothing is certain at this point, but Elliott may also propose divesting the coffee chain's China business, which would echo the spinoff of Yum! Brands ( YUM) business in the Asian market ( YUMC). Another activist investor Starboard Value has also taken a stake in Starbucks, but it's unclear if it intends to push for operational changes despite the company continuing to log successive quarters of falling sales. | | Aviation Shares of JetBlue (JBLU) are still under pressure after cratering 21% on Monday for its largest session loss on record. The catalyst for the plunge was a plan to raise more than $3B in debt, the majority backed by its loyalty program called TrueBlue. Included in the proposal was a $400M convertible note offering to repay maturing bonds, but the move triggered a credit downgrade at all "Big Three" rating agencies. Among the concerns are weakened credit metrics, negative free cash flow, and pressure on margins on earnings. | | Consumer To lure in price-sensitive consumers and compete with McDonald's ( MCD) $5 Meal Deal, KFC ( YUM) is expanding its $5 Value Menu to include chicken nuggets and Famous Bowls. The fast food chain will also offer free delivery on Thursdays for any order on the KFC app or website starting September 5, coinciding with the start of the football season. Competitors like Wendy's ( WEN) and Burger King ( QSR) have also introduced their own value meal offerings after the success of the $5 Meal Deal at McDonald's, which it said has boosted foot traffic by luring away customers from rival chains. ( 20 comments) | | Today's Markets In Asia, Japan +3.5%. Hong Kong +0.4%. China +0.3%. India -0.9%.
In Europe, at midday, London -0.2%. Paris -0.3%. Frankfurt -0.1%.
Futures at 7:00, Dow -0.3%. S&P +0.1%. Nasdaq +0.1%. Crude -0.6% to $79.58. Gold -0.1% to $2,501. Bitcoin -0.7% to $58,796.
Ten-year Treasury Yield unchanged at 3.91%. Today's Economic Calendar | | | | | Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day. | | | | |
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