The end of the first-quarter earnings season is approaching and it's the retail sector's chance in the spotlight.
It could be a rough one for retailers as the U.S. consumer remains cautious, showing a tendency to save instead of spend. Retail sales fell 0.3% in March as consumers cut back on purchases of big-ticket items including cars. Excluding autos, sales ticked up 0.1%. Not exactly the most spend-happy consumer for retailers' first quarter, the period generally from early February to the end of April.
Data on retail sales for April, due on Friday, are expected to show a slight improvement, though, as auto sales grow and higher gas prices alleviate pressures on inflation. Consensus is for a 0.9% increase in April. Core sales, excluding autos and fuel, should advance 0.3%.
"Consumer spending will receive a boost from stronger auto sales and higher gasoline prices," TD Securities analysts wrote in a note. "The underlying tone of this report should be quite constructive, pointing to a rebound in consumer spending momentum after the brief relapse earlier this year."
Major department stores will report this week including Macy's (M - Get Report) on Wednesday morning, Kohl's (KSS - Get Report) on Thursday morning, Nordstrom (JWN - Get Report) on Thursday afternoon and JCPenney (JCP - Get Report) on Friday morning. Fashion brands including Fossil Group (FOSL - Get Report) and Ralph Lauren (RL - Get Report) also will report.
Walt Disney (DIS - Get Report) will report fiscal second-quarter earnings on Tuesday afternoon. The world's largest entertainment company is expected to have enjoyed a significant boost at its film studio after Star Wars: The Force Awakens generated a worldwide box-office haul of more than $2 billion.
About 88% of S&P 500 companies have reported earnings so far and the majority saw the same kinds of issues that plagued companies in the final months of 2015. A stronger U.S. dollar, weaker global demand and a prolonged period of lower commodity prices have reduced earnings and revenue. S&P 500 companies are expected to report a 5.1% slide in average earnings in the first quarter, the fourth straight quarter of declines and the worst losing streak since the Great Recession.
Also on the earnings calendar, Liberty Media (LMCA) , Sotheby's (BID - Get Report) and Tyson Foods will report on Monday morning; Allergan (AGN - Get Report) , Credit Suisse (CS - Get Report) and Dean Foods (DF - Get Report) on Tuesday morning; Electronic Arts (EA - Get Report) on Tuesday afternoon; Wendy's (WEN - Get Report) on Wednesday morning; Shake Shack (SHAK - Get Report) and Symantec (SYMC - Get Report) on Thursday afternoon; and Honda (HMC - Get Report) on Friday morning.
Federal Reserve-speak also will be crucial in the coming week as investors gauge just how likely the central bank is to raise rates when members meet in June, particularly after a disappointing April jobs report on Friday.
Chicago Fed President Charles Evans will speak at the International Financial Services Forum in London on Monday morning, while Minneapolis Fed President Neel Kashkari will address the Economic Club of Minnesota on Monday afternoon.
Cleveland Fed President Loretta Mester, a voting member of the Federal Open Market Committee, will speak on monetary policy in Germany on Thursday morning. Boston Fed President Eric Rosengren and Kansas City President Esther George, both voting members, will give speeches on Thursday in New Hampshire and New Mexico, respectively.
On the economic calendar in the coming week, import and export prices for April will be released on Thursday morning. Producer prices for April, business inventories data for March, and an initial reading on consumer sentiment in May are scheduled for Friday morning.