The Week Ahead on Wall Street

Economic Data Reports

Although short, the last week of May will highlight a string of important data points investors will be paying attention to before the summer months. Here’s what’s in store:

New home sales for April and consumer confidence figures for May are released today. In March, sales of new single-family homes in the United States fell 15.4% to a seasonally adjusted rate of 627,000 units—the biggest drop since July 2013. Investors expect another precipitous decline in the report for April. Along the same lines, consumer confidence figures fell to 86.9 in April, down from 118.8 in March. The month of May was still heartbreaking from a job loss standpoint, but reopening efforts across the country may help lift Americans’ spirits. The FHFA home price and Case-Shiller home price indexes are also published today.

The US Federal Reserve’s Beige Book is released tomorrow afternoon. Published eight times a year, data in the report is aggregated by the 12 district banks and highlights economic conditions in each respective region. The contents help the FOMC make decisions about the economy. Investors also parse through the report to glean information about the current state of affairs and what may lie ahead. EIA Crude Oil Inventories and the MBA Mortgage Applications Index are also released today.

Core capital goods orders, durable goods orders, and initial jobless claims will be published on Thursday. Last week the report showed that another 2.44 million Americans filed for unemployment. Although the figures are trending downward, a total of 38.6 million people have filed jobless claims during the coronavirus pandemic. This week’s number may push that total above 40 million. The second estimate of first quarter GDP is also released. The first estimate showed a contraction of -4.8%, which was worse than the expected reading of -3.5%. Most economists anticipate this number to be revised even further downward in Thursday’s release.

The final trading day of May wraps up with a host of reports. Advance trade in goods, personal income, consumer spending, core inflation, and the final consumer index for May will be published. Personal income, consumer spending, and consumer sentiment will highlight how people are feeling about their finances and the state of the US economy. The core inflation figure will be important to watch as well, given the amount of fiscal and monetary stimulus that has been provided to support the economy during the pandemic.

Earnings

As the first quarter earnings season enters its final stages, fewer names are unveiling their latest results. That being said, there are still a handful of companies to keep an eye on in the week ahead.

For starters, AutoZone (AZO) reports before the bell today. The car parts and accessories retailer is maintained at a “buy” by both UBS and Nomura and an “overweight” by Wells Fargo. At the beginning of the month, Bank of America consumer goods analyst Robert Ohmes said that AutoZone performed relatively well during the last downturn and could also benefit this time around.

A few high profile apparel retailers are scheduled to report their latest figures tomorrow,including Ralph Lauren Corp. (RL), Canada Goose Holdings Inc. (GOOS), and PVH Corp. (PVH). Last week Canada Goose let go of 125 workers, roughly 2.5% of its global workforce. PVH, which owns brands like Tommy Hilfinger and Calvin Klein, is moving forward with its reopening efforts. As of last week, 180 stores across all brands had been opened in North America. It’s been a tough stretch for apparel companies—especially those with physical footprints. Investors will be eyeing any steps to bulk up and improve the brands’ digital presence heading into the post-pandemic economy.

While apparel retailers felt the pain of store closures over the first quarter, other companies like Costco (COST) and Dollar General (DG) saw an influx of customers who flocked to their locations to stock up on essential items. Both are scheduled to report their latest figures on Thursday and some of their competitors, like Walmart and Target, have seen sales surge during the first three months of the calendar year.

One name to watch on Friday will be Canopy Growth Corp. (CGC). The high profile multi-brand cannabis company received a lot of attention due to its partnership with beer, wine, and spirit producer, Constellation Brands (STZ). Originally, Constellation Brands took a 9.9% stake in the Canadian cannabis company in 2017. At the beginning of May, however, the Corona-beer distributor increased its overall ownership of Canopy Growth to 38.6%. It will be interesting to watch how Wall Street reacts to the company’s latest moves.

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