Investors zero in on health of consumer with retail sales, earnings

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Durable spending has been a key reason for the economy’s resilience

Investors in the coming week will get a look at the state of U.S. consumers - whose spending drives around two-thirds of the economy - with a U.S. retail sales report and earnings due from Procter & Gamble, Netflix and a slew of banks.

Conversely, a weak number could reignite concerns of an economic downturn that the U.S. has so far managed to avoid, despite the Fed raising borrowing costs to their highest levels in decades. As third quarter earnings season heats up, investors are also on guard for signs that the conflict between Israel and Hamas is widening. Investors headed to safe-haven assets such as Treasuries and gold on Friday amid worries the conflict could intensify over the weekend.

Earnings reports from other industries will also offer views on consumer behavior. They include consumer products giant Procter & Gamble, electric vehicle maker Tesla, streaming company Netflix, casino operator Las Vegas Sands and America Airlines Group. To be sure, a strong retail sales number could also spark concerns, potentially renewing worries that a too-hot economy will push the Fed to take a more hawkish interest rate stance.

 

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