S&P 500 Forecast: Index recovers on Monday as market waits to view retail sales, earnings

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The S&P 500 declined for its second week in a row, down 0.31%. Monday, August 7 witnessed an impressive rally, but the optimism quickly dissolved as m

on Wednesday and Thursday, respectively. Tuesday will also see the release of US Retail Sales for July, which nicely complements the market’s theme. Analysts expect the data to improve at a better clip than in June.Some of the biggest names in US retail report results this week. First up is The Home Depot. The dividend stalwart is expected to unveil earnings of $4.44 on revenue of $42.19 billion.

Earnings beats from either The Home Depot or Target could usher in more optimism for the entire S&P 500 basket ofas big box retailers have caused plenty of negativity this year. Target’s share price is down 13.6% YTD, while The Home Depot has only recently reached positive territory but still underperformed the S&P 500 index by a large margin.

"We expect core PCE inflation to have fallen below 3% on a year-on-year basis and below 2.5% on a monthly annualized basis, and wage growth to have fallen below 4% year-on-year."The S&P 500 is in a downtrend. It started on July 27, when the index caved after reaching the 4,590 to 4,637 resistance zone. Then last Wednesday, August 9, the 9-day Simple Moving Average finally crossed below the 21-day SMA, and the index has continued to drift lower.

 

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