As the earnings season for US stocks nears its conclusion, investors will focus on key quarterly results from tech giants Salesforce Inc. (NYSE:CRM) and Dell Technologies Inc. (NYSE:DELL), along with retail leader Costco Wholesale Corporation (NASDAQ:COST). Other notable companies reporting include financial institutions Bank of Nova Scotia (NYSE:BNS) and Royal Bank of Canada (NYSE:RY).
Inflation Metrics
Economic data releases this week are critical, especially the all-important Personal Consumption Expenditures (PCE) Price Index for April. As the Federal Reserve’s (Fed) favoured inflation gauge, the PCE Price Index will be scrutinised to assess whether inflation is moving toward the Fed’s 2% inflation target. In March 2024, annual PCE inflation rose to 2.7%, marking a four-month high. Persistent inflationary pressures will temper expectations for interest rate cuts this year.
Consumer Behavior Insights
April’s personal income and personal spending data will also be in the spotlight. March saw personal income rise by 0.5% month-on-month (m-o-m), aligning with market forecasts, while personal spending increased by 0.8% m-o-m, exceeding expectations. These figures will help identify whether consumer strength continues into the second quarter.
GDP Growth Analysis
Attention will turn to the second estimate of first quarter (1Q2024) US gross domestic product (GDP) growth, following an initial estimate of 1.6% annualised growth announced in late April, down from 3.4% in the previous quarter. This revision will be crucial for understanding the trajectory of economic expansion amid signs of a slowdown.
Other Data Releases
Additionally, the Conference Board (CB)’s consumer confidence index for May will provide a barometer of consumer sentiment, essential for forecasting economic trends. April’s pending home sales data will offer a glimpse into future housing market activity. Most pending home sales convert into home sale transactions within one to two months.
Investors processing through this week’s earnings reports and key economic indicators will gain an understanding into the US economy’s health, outlook of inflation and consumer behavior. Stay tuned for a dynamic week as these pivotal updates unfold.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
