The US consumer could influence the US stock market. The latter previously has gone on to reach record highs on the support of an exemplary employment report. The markets are also watching quarterly earnings reports due to be announced by a number of department store operators. The list of such operators include Macy's and also luxury goods sellers like Michael Kors. Disney, the premier entertainment company, will set the tone for investors, with the latter all eyes for the American rtail sales data to be announced on August 12.
According to Terry Sandven of Minneapolis based US Bank Wealth Management, the consumer could influence equities to go higher. He added that the third week of August would be important. If it is observed that retail sales are pulling up due to increased sales, then it is a harbringer for future excellent market performance.
Almost all stocks went into the second week of August on a positive note. The Standard & Poor 500 rose to a new intra-day high on August 5. This came after consecutive two weeks of unchanged lackluster performance on the benchmark index. However, following the bland growth report of the second quarter, the data on jobs painted a happier picture of the American economy. The new data has revealed better consumer spending. This included a higher than anticipated June outlays as an increasing number of households purchased greater number of services and goods. Bruce McCain of Key Private Bank holds the opinion that anything which would suggest the consumer is beginning to step up and also participate in the economy will provide the optimish of an earnings break out in the near future.
The consumer discretionary sector of the Standard & Poor 500, post a bland first half, has risen about four percent compared to the June end. This helped to lead the market. Healthcare and technology followed likewise. As per a Thomson Reuters report, it is expected that the second quarter earnings of consumer discretionary sector have risen 12.5 percent. This is much better compared to nine percent rise at the beginning of July.
The momentum will be continued by the department store operators like Nordstrom, Macy's and Kohl's. Their results will be keenly observed after tepid results a quarter before. Since then, approximately 85 percent of the S&P 500 have already been reported, and earnings in the second quarter are expected to dip below 2.6 percent- not as bad as it as feared.