Markets will look to build on last week’s gains over the next few days as investors anticipate policy announcements from President-elect Trump and his transition team. Volatility may increase as traders rotate into companies expected to benefit under new leadership. Federal Reserve Chair Janet Yellen will testify before a joint Congressional committee on Thursday and could confirm recent market optimism. The odds of a December rate hike reached 81 percent last week.
October retail sales data will be released on Tuesday, with analysts forecasting a 0.6-percent increase. The New York Fed’s latest Empire State Manufacturing Survey, also due out on Tuesday, is expected to show a slight rise in activity. Europe’s third-quarter gross domestic product (GDP) anticipates a 1.3-percent year-over-year increase when data is released tomorrow.
The latest weekly Mortgage Purchase Application Index and the Industrial Production and Capacity Utilization figures for October, which are expected to rise slightly, are due out on Wednesday. Weekly oil inventory is forecast to increase more than a million barrels. The domestic producer price index (PPI) and consumer price index (CPI) are scheduled for release on Wednesday and Thursday respectively. The Bureau of Labor Statistics anticipates a slight rise in each report, which reflects only a moderate increase in inflation.
In addition to CPI data, weekly unemployment claims, housing starts and the Philly Fed manufacturing survey will be available on Thursday. While unemployment claims are expected to remain at multi-decade lows, housing starts are forecast to rise month-over-month. Economists anticipate a slight decrease in the manufacturing survey.
In addition to tech companies Cisco Systems (CSCO) and Salesforce.com (CRM), several major retailers will also release earnings reports this week. Cisco is expected to show continued slow, steady growth in sales and revenues. Several analysts have recently raised price targets on Salesforce. Home Depot (HD), Lowe’s (LOW) and major discount retailers Target (TGT) and Wal-Mart (WMT) will report earnings this week. While Home Depot is expected to surprise the market to the upside, Lowe’s is trying to shake off a recent string of analysts’ downgrades. Target’s sales figures have declined for five consecutive quarters, while Wal-Mart is expected to handily beat analysts’ forecasts. Best Buy (BBY) hopes to build on last quarter’s success when it reports Thursday.