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Retail sales, Fed minutes, earnings: What to watch in markets this week

Yahoo Finance’s Alexandra Semenova joins the Live show to discuss the expectations for retail earnings and the Fed’s upcoming minutes meeting.

Video Transcript

- Well, fresh data from the retail sector could be the latest catalyst for markets. Here's Yahoo Finance's Alexandra Semenova with what we're watching this week on Wall Street. We've been talking a lot, we're really excited about these retail numbers.

- Yeah. News out of the retail sector could be the latest data to drive markets higher this week or, of course, lower depending on how things go. A series of better than expected economic prints recently have really lifted sentiment on Wall Street. So investors will be watching the Commerce Department's July retail sales report closely on Wednesday. And we're expecting to see some moderation over the month due to lower gas prices.

But core retail sales activity is expected to hold up over the month and show that consumers continue to spend money, despite the inflationary pressures that they're facing. And, of course, we also have a number of major retailers reporting earnings this week, Walmart, Target, Home Depot, Kohl's are just some of the names on tap.

And, needless to say, traders are getting ready to be unimpressed by the numbers expecting to see continued pressure from inflation on their margins. Walmart will set the tone tomorrow before the opening bell coming just weeks after the company slashed its outlook and also announced plans for layoffs. We're likely to see more information on that theme, as well as in other retail peers.

And two things to look out for, of course, are what companies are saying about their built-up inventories as some consumers have cut back on spending and what they're saying about back to school season, which could give some retailers a much-needed boost. And as if investors don't have enough on their plate, we'll also get minutes out of the Federal Reserve's last meeting this week. And it could offer some insight about what policymakers are thinking for this fall and whether we've seen peak hawkishness with that last 75 basis point hike.

- Yeah. That Kohl's quarter could be tough to look at. But we've had a rally. Despite all this bad news, stocks have caught a bid from the lows. What are you hearing from folks?

- Yeah. Well, we just saw stocks cap their longest winning streak since November. The S&P has now recovered about half of its losses since plunging from its all-time high in January. So there's reason to be optimistic about this rally, but Wall Street still appears to be torn about this. JPMorgan says that it's going to be sustained for the rest of the year, whereas Morgan Stanley coming out and saying that this is just a pause to the bear market, that the same headwinds remain, economic pressures, worries about the Federal Reserve, and inflation, all of those things will continue to weigh on stocks for the rest of the year.

- Alexandra Semenova, thanks so much.