The consumer will be in focus next week as investors head into the thick of earnings season and await some major macroeconomic reports. So far, just 14% of S & P 500 companies have reported earnings results. But investors are about to get a flood of reports in the week ahead, when they see results from roughly 20% of the index, with 30% more to come the following week. As one strategist noted, Wall Street is about to get insight into the economy from more than half the broad market index. The results could give investors a key piece of information. Now that it appears inflation is indeed easing from its highs, many have turned their attention to the consumer to understand just how soon the Federal Reserve lower rates to avoid a potential break in the economy. With some recent signs of slowing growth, corporate results and commentary could give investors clearer insight into how the consumer is holding up. For investors, that could determine what happens next for markets. This week, the S & P 500 dropped as investors pivoted away from the mega-cap tech leaders into this year’s market laggards such as small-caps. On Friday, Nvidia posted a more than 8% loss on the week, while the small-cap Russell 2000 outperformed the three major indexes, up 1.7%. .RUT 5D mountain Russell 2000 Investors are deliberating whether those moves are a sign of a rotation trade that could broadly lift the market, or a sign of a correction around the corner as the tech sector buckles. Some expect that stocks are due for near-term volatility, but can pull through higher toward the end of the year. “We’re probably due for a pause from equities and probably go sideways,” said Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group. “That’s not to say that a bear market is here. It’s just to say that we’re probably due for a little backing and filling until we get closer to October, and then visibility for the new year.” On Friday, the S & P 500 notched its worst week since April, down nearly 2%. The Nasdaq Composite slid more than 3%. The Dow Jones Industrial Average was the only one to close out the week with gains, up 0.7%. The thick of earnings Earnings season is off to a strong start. Of the 14% of S & P 500 companies that have reported results, roughly 82% have posted positive surprises. Bank results — which investors have continued to scrutinize after last year’s crisis in regional institutions — are mostly over with, with the firms themselves largely coming out unscathed. But more companies tied to the consumer are reporting in the week ahead, including some notable names that could give insight into the housing sector. Results from commercial real estate firm CBRE are on deck, as is paint and coating maker Sherwin-Williams and appliance manufacturer Whirlpool. Those names could give clarity into a critical component of inflation that makes up a major part of the consumer price index and the personal consumption expenditure report. While housing has recently started showing some signs of cooling, investors would want further confirmation that it’s pulling back from its highs. “It’s a major component of household worth and the state of the consumer,” said Charles Ashley, portfolio manager at Catalyst Funds. “Having a robust real estate market is important for the economy in general, and I think also for us to read the tea leaves on what the Fed’s gonna do next.” Credit card company Visa will be reporting next week after American Express’ results this week suggested inflationary pressures have reached the higher-end consumer. Also on deck next week are some initial reports from the Magnificent Seven. On Tuesday, Google-parent Alphabet and Tesla will give investors some early read-throughs on the artificial intelligence trade ahead of the bulk of reports coming later this month. Read throughs on inflation, economy Wall Street is also in for a full slate of macroeconomic reports next week, with some key data on economic growth and inflation that could help investors deliberate how the Fed could bring both into better balance while navigating a soft landing for the economy. “I think the Fed needs to be mindful of the potential for the economy to deteriorate faster than everybody’s expecting right now,” Ashley said. “We’ve already seen some softness in a little bit of the consumer, a little bit in housing. And so, if the Fed is too slow to act, that could accelerate quicker than I think the market anticipates.” A Commerce Department preliminary reading on second-quarter gross domestic product is due out Thursday. It’s expected to show a 1.9% annualized gain, up from 1.4% in the first quarter, according to economists polled by FactSet. The June personal consumption expenditures price index, which is the Fed’s preferred inflation gauge, is set for release Friday. It’s expected to show a monthly gain of 0.1% on the core reading, about in line with the prior month’s reading, and 2.5% from a year ago, down 0.1 percentage point from May. The all-items reading is projected to rise 0.1% monthly and 2.4% annually. The Fed targets 2% inflation. Elsewhere, June existing home sales data is also due out early in the week. Week ahead calendar All times ET. Monday July 22 8:30 a.m. Chicago Fed National Activity Index (June) Earnings: Verizon Tuesday July 23 10 a.m. Existing Home Sales (June) 10 a.m. Richmond Fed Index (July) Earnings: 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 a.m. PMI Composite preliminary (July) 9:45 a.m. Markit PMI Manufacturing preliminary (July) 9:45 a.m. 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 a.m. Durable Orders preliminary (June) 8:30 a.m. GDP first preliminary (Q2) 8:30 a.m. Initial Claims (07/20) 8:30 a.m. Wholesale Inventories preliminary (June) 11 a.m. Kansas City Fed Manufacturing Index (July) Earnings: American Airlines , CBRE , Valero Energy , Hasbro , Tractor Supply , RTX , Northrop Grumman , Southwest Airlines , Honeywell International , AbbVie , PG & E , Norfolk Southern Friday July 26 8:30 a.m. Personal Consumption Expenditures price index (June) 8:30 a.m. Personal Income (June) 10 a.m. Michigan Sentiment final (July) Earnings: T. Rowe Price Group , Bristol-Myers Squibb , Colgate-Palmolive , 3M
