The Week Ahead on Wall Street

Economic Data

Today, existing home sales for July are released. Sales of existing homes in the US rebounded in June, albeit slightly, up 1.4% to 5.86 million units. The real estate market is dealing with tight inventory which has driven the prices of homes up and is hurting sales of existing homes. Investors will be paying close attention to July’s report to see if the supply-and-demand imbalance is improving.

Tomorrow, be on the lookout for new home sales in July to be released. Homebuilders are seeing brisk demand, which has driven up the prices for new homes. But with labor shortages, a lack of property to build on, and rising material costs, home builders have been doing less construction in recent months. It will be interesting to see if that situation is improving when new home sales for July are released. In June new home sales fell 6.6% to 676,000 units.

On Wednesday, the Commerce Department releases durable goods sales numbers for July. This data point tracks consumer orders of cars, appliances, and other big-ticket items. In June, durable goods orders increased 0.8% to $257.6 billion compared to May. Economists were looking for 2% growth. If orders increase again in July, it will signal that the economy is still seeing strength despite labor shortages, supply-chain issues, and increasing COVID-19 cases.

On Thursday, the Labor Department releases initial and existing unemployment claims for the prior week. Despite the rising COVID-19 cases, unemployment has been declining as more people return to work. Last week initial claims came in at 348,000, setting a new pandemic low. Investors will be paying close attention to see if this trend continues as the Delta variant spreads.

On Friday, be on the lookout for the Commerce Department to release consumer spending numbers for July. This data point tracks how much US consumers are spending on goods in a given month. While consumer spending increased slightly in June, that may not be the case for July. The Delta variant has spread rapidly since June and consumers have been reining in spending. Investors will be looking for any signs the economy is cooling when this data point is released. Also Friday personal income numbers for July and consumer sentiment for August are released.

Earnings

Today, JD.com (JD) reports quarterly earnings. Concerns are rising that China’s retail sector is hurting as COVID-19 takes a toll on the economy. Retail sales in China increased 8.5% in July, which was below the 11.5% growth analysts had forecast. As for ecommerce, sales only increased 4.4%. Investors have reacted by selling off shares of JD. They will be paying close attention to what JD.com has to say about the current environment and the impact COVID-19 is having on ecommerce.

Tomorrow, be on the lookout for Nordstrom (JWN) to report quarterly earnings. Like other retailers, Nordstrom has been benefiting from the economic recovery, but any gains could be at risk with the Delta variant spreading. Data points are emerging showing that consumers are reining in their spending. Investors will be looking for any insight from Nordstrom about the impact rising COVID-19 cases are having on back-to-school sales and general demand.

On Wednesday, Toll Brothers (TOL) reports quarterly earnings. With demand still surging for new construction, Toll Brothers has not been able to meet all the demand. To build its presence in Las Vegas, a booming real estate market, it recently acquired local home builder StoryBook Homes. Investors will be paying close attention to see if acquisitions are a viable strategy to deal with supply-side shortages. They will also be looking for clues that the tight labor market and rising material costs are starting to ease.

Be on the lookout for Peloton (PTON) to report quarterly earnings Thursday. The maker of at-home gym equipment was a huge stock-market darling during the pandemic. As the economy recovered from the pandemic, Peloton lost some of its luster with investors as they turned to reopening plays. With COVID-19 cases rising again, investors are turning back to those pandemic stocks. They will be looking for any signs demand is rapidly accelerating again.

Also Thursday, Gap (GPS) reports quarterly earnings. The company is benefiting from a reduction in costs and a focus on Old Navy and Athleta—its two brands which have higher margins and are both experiencing strong growth. Investors will want to hear more about how the company is overhauling its branding when Gap reports quarterly earnings.

The Week Ahead at SoFi

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