The Week Ahead on Wall Street

Economic Data

There are no economic data reports scheduled for today.

Tomorrow, be on the lookout for the August Import Price Index, the August Industrial Production Index, and the August capacity utilization rate. The September Empire State Manufacturing Index is also due. This index is based on responses to a survey about business conditions from roughly 200 manufacturing executives in New York state. In August, the index dropped 13.5 points to 3.7, signaling that economic growth slowed down last month.

On Wednesday, the September NAHB Homebuilders Index and July business inventories are released. Additionally, the Federal Open Market Committee will finish its first meeting since Jerome Powell, Chair of the Federal Reserve, announced that the central bank would allow inflation to run higher than 2%. This is the last time the Fed will meet before the election and there is a widespread, general consensus that rates will be left near zero. August retail sales will also be announced. Retail sales measure consumer demand for finished goods and include sales from all food service and retail stores. Consumer spending accounts for two thirds of US GDP, so this figure is important for gaging the country’s economic health.

On Thursday, watch for August housing starts, August building permits, the Philly Fed Manufacturing Index, and initial jobless claims. The number of claims hit 884,000 last week, which was slightly higher than Dow Jones predictions of 850,000. Although many expect that the labor market will gradually recover, this number is a reminder that there is a long way to go to get back to pre-pandemic levels.

To round out the week on Friday, the current account deficit for Q2 will be released, along with the September Consumer Sentiment Index. This metric tracks individuals’ feelings about their financial health, the health of the economy, and the potential for economic growth. In July and August, the index was lower than it was in May and June.

Earnings Reports

As we head into the final weeks of the third quarter, there are fewer names reporting earnings. With that said, here are a handful of companies that investors have on their radar this week.

Lennar Corp. (LEN), the Miami-based construction and real estate company, hands in its report card today. Lennar is one of the largest homebuilders in the country. It also invests in multifamily rental properties, and has a financial services arm that provides mortgage financing, title and closing services, and other offerings. This summer has been a strange time for the housing market. Many multifamily rentals are struggling to find tenants as people look to social distance in homes away from urban centers. For this reason and others, residential housing starts rose 22.6% in July 2020—the biggest leap since October 2016. Investors will be curious to see how Lennar responded to changing conditions in the housing market.

Tomorrow, FedEx Corp (FDX) will report its latest results. The company, which has annual revenues of $69 billion and over 500,000 employees, has been working hard to keep up with the pandemic-induced ecommerce boom. Investors will be curious to see how FedEx fared recently and are also looking ahead at what is expected to be the busiest holiday shipping season in the company’s history. Because some people may not feel comfortable traveling during the holidays this year, analysts predict that people will ship more gifts through FedEx and other services than ever before.

Adobe Inc (ADBE) will also report tomorrow. Last quarter, the software maker’s sales were up 14% as companies turned to its pdf capabilities, e-signature technology, and other services while working remotely. Adobe is also working to expand its customer base and help schools with distance learning by providing students and teachers with services like Creative Cloud.

Cracker Barrel Old Country Store Inc (CBRL) is another company to watch tomorrow. Like many restaurants, Cracker Barrel, which operates 660 locations, has been on a roller coaster ride during the pandemic. The restaurant adapted to new conditions by offering curbside pickup, implementing social distancing measures in its dining rooms, and creating new menu offerings. However, so far in 2020, the company’s shares are down 11.2% compared to the rest of the industry’s 6.9% growth.

Scholastic Corp. (SCHL) the children’s publishing, education, and media company, will report earnings on Thursday. Analysts expect the company’s revenue to be about $219 million—a 5.9% drop from the same period a year ago. As millions of students begin the school year remotely, Scholastic may have received a boost from parents buying books and other materials for their children to use at home, but it is likely that school districts are purchasing far fewer Scholastic products this year.

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