Investing.com - Here’s a preview of the top 3 things that could rock markets tomorrow.
1. Retail Earnings Continue with Macy’s
Retail earnings are off to a relatively good start.
Home Depot (NYSE:HD) numbers were strong, although the stock reaction was muted given the recent run on the shares and on some concern over margin guidance. And handbag retailer Tapestry (NYSE:TPR) jumped on strong sales of its Kate Spade bags.
Before the bell tomorrow, department store heavyweight Macy’s will issue fiscal second-quarter numbers.
On average, analysts expect that the company earned 50 cents per share for the period on revenue of about $5.56 billion.
The numbers will have to be strong to justify the recent tear Macy’s shares have been on. The stock is up more than 50% year to date.
So far, the linchpin of Macy’s turnaround strategy has been to improve its digital presence, close its underperforming stores and sell some of its real estate. The company is also investing heavily in its Bluemercury chain of specialty beauty stores and discount outlet Macy's (NYSE:M) Backstage.
Digital performance will be crucial for the company to produce a quarter that still lures in investors with the stock close to a 52-week high.
2. Retail Sales Government Data Also Coming
Along with individual retail earnings, Wall Street will get data on overall retail activity.
The Commerce Department will issue July retail sales numbers at 8:30 AM ET (12:30 GMT).
Economists expect that retail sales rose 0.2% last month, down from a 0.5% rise in June. They predict core retail sales, which exclude autos, rose 0.4% in July, the same as the month before.
At the same time, the Labor Department will issue its preliminary measure of second-quarter unit labor costs, a gauge of consumer inflation. Economists are looking for a 0.4% rise. That would be up from 0.2% in the year-ago quarter.
3. U.S. Crude Drawdown Expected
Oil prices were lower today, shaking off worries about countries cutting Iranian imports ahead of U.S. sanctions.
But, as usual for a Wednesday, tomorrow’s market direction will be heavily influenced by the Energy Information Administration’s (EIA) weekly inventory report.
The numbers arrive at 10:30 AM ET (14:30 GMT).
Energy analysts are expecting a drop in U.S. crude inventories of 2.449 million barrels for last week.
Distillate stocks are expected to have dropped by 964,000 barrels, while analysts are forecasting a drawdown in gasoline stockpiles of 583,000 barrels.
Reports on Tuesday indicated that Saudi Arabia communicated to the Organization of Petroleum Exporting Countries that it had reduced output by 200,000 barrels per day (bpd) in July to 10.29 million bdp, despite a June agreement with the cartel to increase production in order to cover shortfalls from outages and sanctions on Iran.
In its monthly report, OPEC, using secondary sources, had calculated Monday that the kingdom’s daily production fell by 52,800 to 10.39 million barrels in July from the prior month.