Focus swings to inflation data

European equity markets

Hesitant start of the week in Europe; after equity markets in the APAC region ended, the session little changed. In Japan, the producer price index fell by 0.4% in October month-over-month (MoM), when economists expected it to be flat. Year-on-year, the index rose by 0.8%.

The British pound

The focus will be on the GBP throughout the week. On Tuesday, the unemployment rate is expected to rise to 4.4% in September. On Wednesday, consumer price index growth is forecast to decelerate to 4.9% in October year-over-year (YoY). And on Friday, retail sales are seen falling by 0.4% in the October month-over-month (MOM).

The US dollar

As for the USD, it is likely to react to the latest US inflation data that will be released tomorrow afternoon. Headline consumer price index (CPI) is expected to rise by 3.8% in October year-over-year (YoY), after a 3.7% increase the previous month. Core CPI growth is forecast to remain at 4.1% in October.

British Land

Elsewhere on the equity markets, British Land expects annual rental value growth at the top end of its previous forecast range. The group posted underlying profit growth of 3.4% to £142 million. Dividend up 4.8% to 12.16 pence. BAE Systems maintains its guidance for annual earnings to rise by as much as 12%.

The National Retail Federation

Over in the US, we are coming at the tail end of the earnings season, and this week, focus will be on the retail sector. More than earnings, these groups' forecasts will be all that matters in the eyes of investors. The National Retail Federation says holiday sales, including e-commerce and non-store sales, would rise between 3 and 4% to $957 billion and $967 billion in November and December. Last year, sales were up 5.4% and 12.7% from the previous year.

Home Depot

On Tuesday, Home Depot is expected to post earnings of £3.76 per share on revenue of $37.63 billion. That compares to Earnings per share (EPS) of $4.24 and revenue of $38.9 billion. Home Depot is going through difficult times. Historically, home improvement stocks have been negatively impacted by interest rate hikes. At the same time, weakening consumer demand and higher input costs have squeezed margins.

Walmart

On Thursday, the Street anticipates Walmart to post earnings of $1.51 per share and revenue of $159.3 billion. In the same quarter last year, earnings came in at $1.50 per share on revenue of $152.8 billion. Over the past few years, Walmart has focused on developing its e-commerce segment. In 2019, online sales amounted to just over $25 billion worldwide. In its most recent fiscal year, e-commerce reached $82.1 billion.

This strategy put Walmart in a better situation than some of its competitors, at a time when brick-and-mortar retailers don't do as well. Investors will be looking for any shift in consumer behaviour, online shopping trends, and any information on physical store performance to help gauge the health of its brick-and-mortar segment.