Investors looking for direction on the near-term course of interest rates will strongly monitor the Federal Reserve's July meeting minutes, which are due out on Wednesday

Retail earnings

The second quarter earnings season is coming to an end, and the S&P 500 results show a mixed picture. Companies are outperforming analysts' profit forecasts at the greatest pace in over two years, but their outperformance in matching analysts' sales forecasts has slipped to its lowest level since early 2020.

This week, the biggest American retailers are expected to release their financial results, providing investors with crucial information on the state of consumer spending, a key engine of the American economy.

Home Depot is scheduled to release results before the market opens on Tuesday, Target on Wednesday, and Walmart the following day. In the next weeks, reports from other significant stores including Macy's, Nordstrom, Kohl's, and Lowe's will be released.

Federal Reserve Minutes

Investors will be paying close attention to the minutes released by the Federal Reserve on Wednesday from its July policy meeting before markets begin to focus on its annual meeting at the end of the month.

Last month, the Fed increased interest rates by 25 basis points and hinted that there would be another increase in September. Although markets are anticipating a pause in rate rises in September, the minutes will aid investors in determining the appetite for more rate increases.

Although consumer and producer prices in the United States grew slightly in July, data released this week revealed that the general trend suggested that inflationary pressures are lessening.

To get inflation back down to its target of 2%, the U.S. central bank raised interest rates by 5.25 percentage points since March 2022.

US Data

Tuesday marks the publication of the U.S.'s July retail sales data, which is anticipated to reveal a pick-up in demand at the beginning of the third quarter following a smaller-than-anticipated gain in June.

The housing sector's data is anticipated to show indications of stabilisation in Wednesday's statistics on construction permits and home starts.

On Thursday, the United States will also announce its weekly data on new unemployment claims, which is anticipated to edge slightly down following a bigger-than-expected rise the previous week.

Crude Oil

Oil prices increased on Friday as a result of the International Energy Agency's projection of record global demand and tighter supply. This is the longest winning streak since 2022, with prices rising for seven straight weeks.

The demand reached an all-time high of 103 million barrels per day in June, and the IEA forecast that it might reach another milestone this month.

A large fall in stocks over the course of 2023 is anticipated as a result of output reductions from Saudi Arabia and Russia, according to the IEA, which might result in an increase in oil prices.

(Sources: investing.com, reuters.com)