Earnings season shifts into high gear next week with reports from Bank of America, Morgan Stanley, Lockheed Martin, Tesla, Netflix, IBM, Goldman Sachs, Johnson & Johnson, and United Airlines, among others. The U.S. Census Bureau will issue data on retail sales for the month of June, offering a valuable update on consumer spending. We’ll also receive the latest reports on the housing market, including building permits, housing starts, and existing home sales for June, as well as the NAHB’s Housing Market Index. The latest inflation readings from the U.K., eurozone, and Japan will also become available.
A Busy Week of Earnings
Earnings season is set to enter a busy week with Bank of America, Morgan Stanley, Lockheed Martin, Tesla, Netflix, IBM, Goldman Sachs, Johnson & Johnson, United Airlines, and many others reporting earnings.
On Tuesday, investors will be monitoring Bank of America’s earnings for clues as to how the Fed’s rate hikes have impacted profitability at big banks. Bank of America’s interest margins were likely boosted by higher interest rates. Net interest income at America’s second-largest bank is projected at $14.29 billion, up 14% from the same quarter last year, according to research from Zacks.1
June Retail Sales
On Tuesday, the U.S. Census Bureau will release June retail sales figures, providing a timely update on consumer spending. Retail sales, which are not adjusted for inflation, likely rose 0.5% last month, extending May’s 0.3% gain. Year-over-year, they were likely up just 1.1%, which would mark the smallest annual increase since a decline early in the pandemic. Consumer spending, which accounts for more than two-thirds of U.S. gross domestic product (GDP), has been robust over the past two years despite high inflation and lingering recession fears.
Housing Market Updates
We’ll get the latest updates on the housing market next week, including June building permits, housing starts, and existing home sales, and the NAHB’s Housing Market Index for July. Housing starts, a proxy for home construction, likely fell drastically to 1.45 million units in June, after unexpectedly surging to 1.63 million units in May, which marked the highest figure in over a year. Building permits were probably little changed last month, holding steady near 1.49 million units.
On Thursday, the National Association of Realtors (NAR) will release last month’s existing home sales figures. They’re projected to have fallen slightly to 4.23 million units from 4.3 million in May. Sales tumbled last year as rising mortgage rates impacted housing demand, bottoming out at four million units in December, which marked the lowest figure since 2010. Sales have rebounded since, but could resume their downward slide if mortgage rates continue to rise, driven by the Federal Reserve’s interest rate hikes.