By Bill Hornbarger, Chief Investment Officer
Three Things to Watch
- The consumer, and in particular, consumer spending will be in the spotlight this week. On Tuesday retail sales for October will be released and they are expected to be strong, up 1.3% for the month, which would be the third consecutive month of gains and the strongest of the three. In addition, the big box retailers report earnings, including Walmart, Target, Lowe’s, and Home Depot. Walmart’s U.S. sales volume alone is so high that its read on consumer spending trends is considered a barometer for the economy.
- Multiple regional manufacturing surveys will be released and the price readings will be closely watched as inflation remains a concern. Empire District (New York) will be released on Monday, followed by The Philadelphia Fed Business Outlook and the Kansas City Fed Manufacturing Activity reports on Friday.
- President Biden and Chinese President Xi Jinpin are scheduled to hold a virtual summit Monday evening amid hopes that recent tension can be de-escalated.
Three Things to Know
- The University of Michigan Consumer Sentiment data released on Friday featured the lowest overall reading in a decade. Both components (current conditions and consumer expectations) were weak. Despite this, retail sales for October are expected up 1.3% and the S&P 500 is at/near record highs. (Source: Haver)
- The consumer price index (CPI) grew 6.2% year-over-year in October, the largest increase since 1982. Energy prices are up 30% on a year-over-year basis per the CPI report and have a 7.5% weight in the index. Shelter represents 32% of CPI and was up 3.5% versus last year. (Source: Haver)
- The average price of a gallon of gasoline has gone up by more than $1 during calendar year 2021, rising from $2.253 a gallon as of Dec. 31to $3.421 a gallon as of Friday, Nov. 5. The last calendar year that experienced gas prices rising by at least $1 a gallon was 2009 (Source: MFS, AAA).
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.