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Things to Watch This Week

US Retail Sales

Data of the U.S. economy retail sales data for October, which will be released on Tuesday, including information on industrial production. On Wednesday, the housing market report and building permits, and on Thursday followed the weekly figures on initial jobless claims.

U.S. inflation hits the highest level in more than 30 years amid the global supply chain crisis. Consumer confidence data fell to its lowest level in a decade this month as declining purchasing power threatens living standards.

Investors expect the Fed to raise interest rates faster than previously announced in order to stop rising inflation.

Retailer’s Performance

Major retailers will release their results on Tuesday. These include Home Depot (NYSE: HD), Walmart (NYSE: WMT), Target (NYSE: TGT), and Macy’s (NYSE: M). These will face special scrutiny before the start of the holiday shopping season. Investors are watching retailers’ reports to determine how inflation will affect profits or costs will be passed on to consumers.

On average, third-quarter results are better than expected. On Friday, 459 companies in the S&P 500 index reported. 80% were better than analysts expected.

China’s Economic Recovery Slows Down

The president of the United States will hold a virtual meeting with Chinese President Xi Jinping on Monday. Amid rising tensions between the world’s two largest economies.

China’s economic recovery is weakening. This is due to slow growth combined with rising inflation concerns, while proactive measures are being taken to control the spread of COVID-19. In addition, the massive debt crisis in the country’s real estate sector and the energy crisis are also depressing manufacturing activities.

Today’s agenda includes the report on retail sales, fixed capital formation, and industrial production.

U.K. Jobs Data

The BoE wants to gather more information on the strength of the U.K. labor market before raising interest rates.

Therefore, Tuesday’s latest employment report needs to be strong in terms of October employment numbers. How strong the numbers will be after the wage subsidy program expires in late September may influence further decisions.

The labor market data will be followed by inflation figures on Wednesday and retail sales figures on Friday. Inflation is expected to accelerate further.

Europe Faces Severe COVID 19 Outbreak

Europe is hit by the COVID-19 pandemic amid the economic recovery in a fragile region.

Europe accounts for more than half of the average 7-day infections worldwide and about half of the recent deaths. This is the highest level since April last year.

Many countries, such as the Netherlands, Germany, Austria, and the Czech Republic, imposed a three-week partial ban on Saturday. These countries are taking restrictions or planning new measures to slow the spread.

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