Consumers in Focus Again in Coming Week

NEW YORK (TheStreet) -- A key question weaving through market chatter next week will be when will consumers start opening their wallets again.

Reports from flagship brands like Wal-Mart(WMT Quote), Macy's(M Quote), J.C. Penney (JCP Quote) and Abercrombie and Fitch (ANF Quote) show a continuation of weak sales and revenue. And while some retailers issued bullish outlooks for the key shopping season ahead, a consumer confidence report on Friday portended the opposite.

Still, the market has continued to surge higher -- albeit in fits and starts -- for several months since the rally first launched last spring. Despite economic headwinds, the Dow Jones Industrial Average is up roughly 6% this quarter, 17% for the year and 55% since March's low. It has been increasingly difficult for skeptics who shorted the rally -- and lost significant money doing so -- to maintain their bleak facade.

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"It's amazing how the equity market just continues to grind higher," says Benny Lorenzo, chairman and CEO of the New York-based investment bank Kaufman Bros. "There's continued skepticism about where it can go, but it continues to grind higher."

He notes that "it wasn't too long ago" that the market was worried about a dismal jobs report on Nov. 6 showing another 190,000 net job losses and the unemployment rate sailing past the 10% mark. Then, Wal-Mart missed Wall Street's revenue forecast on Thursday, with a decline in same-store sales, but its stock nonetheless gained 27 cents.

"People sort of shrugged that off, too," says Lorenzo.

Next week, a slew of other retailers will report last quarter's results and issue forecasts for the six weeks of intense competition ahead. Among them are Saks(SKS Quote), Target (TGT Quote), The TJX Companies(TJX Quote), BJ's Wholesale Club(BJ Quote), Gap(GPS Quote), Sears(SHLD Quote) and a few other shopping mall mainstays like Pacific Sunwear(PSUN Quote). The Census Department's overall retail sales report for October will also be released on Monday. The market expects an increase of 0.9%, according to Briefing.com.