The Week Ahead on Wall Street

Economic Data

Today, the Chicago National Activity Index for August is released. This metric measures economic activity and related inflationary pressure. In July, the figure was +1.18, a drop from +5.33 in June. This means that there was still economic growth, but it slowed between June and July.

Tomorrow, look out for August existing home sales. This figure climbed 24.7% in July. Many people are still looking for more space and for a way to stay distant from others, so they are buying homes. Each of the four main regions of the country saw double-digit month-over-month growth, and every region saw year-over-year growth except for the Northeast.

On Wednesday, Markit Manufacturing PMI and Markit services PMI for September are released. The Purchasing Managers Index measures economic trends and is based on a monthly survey given to supply chain managers. Between July and August, Markit Manufacturing PMI climbed from 50.9 to 53.1, showing increased growth in the manufacturing sector.

On Thursday, watch for new home sales and initial jobless claims. The Labor Department reported 860,000 jobless claims during the week ending September 12. Six months after the employment crash caused by COVID-19, initial claims remain extremely high. For context, the figure came in at 211,000 in the same week last year.

To round out the week, on Friday, look for August durable goods orders. This economic indicator measures current industrial activity. In July, durable goods orders climbed for a third straight month. Investors will be watching to see if this trend continues.

Earnings Reports

Investors will be curious to see how various sectors weathered a summer like no other as they parse through earnings reports released this week. These reports may give them some insights into how working from home, roadtripping, shopping online, and other trends impacted several key companies.

Tomorrow, AutoZone Inc (AZO), the Tennessee-based car parts retailer, will report its earnings. Though people have been commuting far less during the pandemic, many opted for road trips instead of flying this summer, which has put wear and tear on cars. Additionally, the DIY boom has led some people to try to fix their cars themselves, so they may have headed to AutoZone for parts.

Stitch Fix (SFIX), the online personal styling service that uses machine learning to predict what customers will want, also reports tomorrow. People are buying less formal clothing at the moment because they are working from home and not attending many events, which has hurt clothing retailers across the board. However, Stitch Fix is in a better position than physical department stores like Dillard’s (DDS) and Macy’s (M) because of its virtual business model.

On Wednesday, General Mills (GIS), the maker of Cheerios cereal, Yoplait yogurt, and other brands, is scheduled to deliver its latest report. Analysts expect the company’s revenue to be about $4.4 billion, which would be 4.4% higher than the same quarter a year ago. As people have done more dining at home due to restaurant closures and economic downturn, they have purchased more products from General Mills.

Costco (COST) hands in its report card on Thursday as customers continue to flock to the retailer for bulk foods and supplies. Additionally, Costco has benefitted from its subscription model, a strategy the company has been doing for years, which competitors like Amazon (AMZN) and Walmart (WMT) have adopted more recently.

Lastly, Darden Restaurants (DRI) will also report earnings on Thursday. The company, which owns Olive Garden and other restaurant chains, has been battered by closures and capacity restrictions. It is expected to report revenue of about $1.53 billion—a 28.5% drop from the same quarter last year.

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