Retail sales, Lyft earnings: What to know in the week ahead
This week investors will turn their attention to another set of corporate earnings results, though the number of reports per day will slow from the heavy pace of the past couple weeks. Economic releases will include two sets of U.S. inflation reports, along with the Commerce Department’s July print on retail sales.
by far the worst of any single country worldwide. President Donald Trump over the weekend signed four executive actions to implement a federal eviction moratorium, $400 weekly federal enhanced unemployment insurance benefit, relief for student borrowers and temporary payroll tax suspension, as a move to quickly roll out stimulus to individuals, after two weeks of talks in Congress failed to convene lawmakers around terms of a new relief bill.” data-reactid=”17″>The reports come against a backdrop of a still-dire pandemic situation in the U.S., with confirmed cases over the weekend domestically nearing 5 million infections – by far the worst of any single country worldwide. President Donald Trump over the weekend signed four executive actions to implement a federal eviction moratorium, $400 weekly federal enhanced unemployment insurance benefit, relief for student borrowers and temporary payroll tax suspension, as a move to quickly roll out stimulus to individuals, after two weeks of talks in Congress failed to convene lawmakers around terms of a new relief bill.
Lyft earnings et. al
Earnings season continues this week with another set of companies reporting quarterly earnings results, including a handful of newly public corporations.
this week will be Lyft’s (LYFT), scheduled for Wednesday after market close.” data-reactid=”24″>One report set to be closely watched this week will be Lyft’s (LYFT), scheduled for Wednesday after market close.
UBER) last week reported a 75% slump in mobility gross bookings, reflecting evaporated travel demand during the coronavirus pandemic. Uber partially offset its top-line slide with a more than doubling of its food delivery business, but Lyft’s more narrowly focused ride-hailing business will have little to fall back on in absence of normal levels of ridership.
Uber CEO Dara Khosrowshahi said ride-hailing recovery was “lagging” relative to the rest of the world given the ongoing pandemic. Lyft, however, has typically been prudent about cost-cutting, setting up a potential buffer on bottom-line results.” data-reactid=”26″>Lyft has also focused only on the North American market for ride-hailing, especially in the U.S., where Uber CEO Dara Khosrowshahi said ride-hailing recovery was “lagging” relative to the rest of the world given the ongoing pandemic. Lyft, however, has typically been prudent about cost-cutting, setting up a potential buffer on bottom-line results.
LMND), ZoomInfo Technologies (ZI) and Vroom Inc (VRM). The insurance company, subscription software company and online car rental company, respectively, each listed within the last three months, making their quarterly reports their first as publicly traded companies. The reports will test the endurance of these companies’ soaring stock prices, which up until now have had few positive or negative catalysts to derail them. All of these three companies have more than doubled their stock prices since listings, as investors snapped up shares of newly public companies to try and get in early on expected growth.
So far this earnings’ season, most companies managed to clear a low bar for second-quarter expectations, with a lack of company guidance surrounding the coronavirus pandemic leading to widely dispersed earnings estimates among Wall Street analysts.
As of Friday, 83% of S&P 500 companies had surprised to the upside on earnings per share for the second quarter, FactSet’s John Butters wrote in a note late last week. If that proportion carries through for the rest of the quarter, it would mark the highest percentage of positive surprises among S&P 500 companies since FactSet began tracking the metric in 2008.
Inflation data, Retail sales
Key economic data reports set for release this week include the US Bureau of Labor Statistics’ producer price index (PPI) and consumer price index (CPI) results, set for release on Tuesday and Wednesday, respectively.
The CPI is set to be especially key, following the index’s biggest jump in 8 years in June, as gasoline prices rebounded by more than 12% to comprise more than half of the gain. Consensus economists expect July’s CPI moderated to a 0.3% month on month rise, from June’s 0.6% increase.
“The impact of the coronavirus pandemic on the inflation outlook is uncertain. Though as demand continues to recover and firms feel like they can relax discounting efforts, consumer prices should continue to edge higher,” Sam Bullard, senior economist for Wells Fargo Securities Economic Group, wrote in a note. “Assuming our base case unfolds (no significant resurgence of the virus leading to another widespread lockdown), we expect prices to steadily rise in the coming months, albeit at a modest pace.”
Retail sales will round out the week of economic data reports on Friday, with consensus economists expecting these to have risen by 1.9% in July after a 7.5% gain in June. This would mark the third straight month of gains in retail sales following a record 14.7% slide in April. However, it would also be the third consecutive month of moderating gains, with retail sales having jumped a record 18.2% in May.
The past two months have brought retail sales up to just 0.6% below February’s levels before the coronavirus pandemic. And control group sales, which exclude more volatile autos, gas and building materials, jumped 5% above February’s levels as of last month, underscoring a recovery in consumer spending as lockdown measures eased.
“Headline retail sales should get a nice boost from the continued acceleration in vehicle sales, which rose in July to a 14.5 million annualized pace from 13.2 million in June. Gasoline prices also advanced more than 4% on the month and firmer than the seasonal norm,” RBC Capital Markets economists wrote in a note Friday. “While chain-store sales were up about 1% on the month, other retail measures (number of stores open, retail employment) suggested a plateauing in July.”
RCL), Duke Energy Corp (DUK), SeaWorld (SEAS), Marriott International (MAR), before market open; IAC/InteractiveCorp (IAC), Occidental Petroleum (OXY), J2Global (JCOM), ZoomInfo Technologies (ZI), Novavax (NVAX) after market close
LMND) before market open; SmileDirectClub (SDC), Lyft (LYFT), Vroom Inc (VRM), Cisco (CSCO) after market close
TPR) before market open; Applied Materials (AMAT) after market close
DKNG) before market open
@emily_mcck” data-reactid=”65″>Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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