The Week Ahead — Housing, Fed Speakers and Retail Sales in Focus

Highlights

• Retail sales are expected to climb modestly in April.
• Economists expect existing home sales to have declined last month.
• Fed speakers will be making the rounds.

Investors are on edge as the banking crisis drags on, inflation remains high and the economy is stuck in the doldrums. However, there are several pieces of data that have the potential to move the markets in either direction, which could spark even more volatility in stocks.

Key economic indicators this week include Retail Sales and Existing Home Sales in addition to comments from several Fed officials that could set the tone in the markets. In this article, we’ll break it down and outline what to expect. 

Retail Sales

Retail sales for April will be released on Tuesday. Despite the economic headwinds, including inflation and rising interest rates, consumers continue to head to the stores and spend money. Nevertheless, the spending trajectory has been on the decline since January.  

Economists predict that retail sales climbed higher by 1% in April. Results excluding auto sales set to rise a more moderate 0.5%, according to Wells Fargo. The labor market remains strong, which suggests that incomes will continue to hold the line to fuel consumer spending. 

In addition to the retail sales data, look out for earnings this week from top retailers including Home Depot (Tuesday), Target (Wednesday) and WalMart (Thursday). 

Housing

Investors will also be keeping a keen eye on existing home sales for April. This metric declined by 2.4% in March as demand in the typically strong spring season began with a whimper. Interest rates weighed on potential homebuyers despite the fact that rates are off their worst levels of over 7% in Q4 2022. 

Home prices finally eased in April, reversing a trend that had been in place for the past two years. However, economists are bracing for the trend of declining home sales to continue in April amid a high inventory of properties on the market coupled with rising vacancy rates for rentals.

Fed Speakers

Several Fed speakers are expected to make the rounds this week on media appearances and conferences. Look out for comments from Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee, both of whom are considered to have dovish outlooks on monetary policy, early in the week.