Coronavirus, consumer sentiment, GDP, retail earnings: What to know in the week ahead – Yahoo Finance

Coronavirus developments, consumer sentiment surveys, the second print on fourth-quarter U.S. gross domestic product and a slew of corporate earnings results will draw investor focus this week.

Stock futures sank as trading began Sunday evening, indicating Wall Street was in for a rough ride after Mondays opening bell, as the viruss toll mounted outside of China. Italy and South Korea reported a surge in confirmed cases, while Iran also grappled with new infections and at least 5 deaths.

The mysterious infection roiled U.S. stocks at the end of last week amid a spike in new cases. It spurred jitters over the extent of the outbreak, both in its human impact on its effect on economic activity across the globe.

In the U.S., IHS Markits purchasing managers indices on Friday represented the first major economic data report to reflect a marked impact from the coronavirus, with the composite index for the services and manufacturing sectors dipping to the lowest level in seven years.

Amid the outbreak, two consumer sentiment surveys will be in focus this week. The Conference Board is due to release its February consumer confidence index at 10 a.m. ET Tuesday. Consensus economists expect the index will rise modestly relative to January, coming in at 132.0 versus 131.6 at the start of the year as a strong labor market helps offset fears over the coronavirus.

The Conference Boards consumer sentiment index has risen for three straight months between November and January.

The Conference Boards consumer confidence index should remain elevated in February. Jobless claims remain low and wages are slowly by steadily rising, Wells Fargo Securities economists wrote in a note Friday. Low gasoline prices, in the most simple of terms, mean more money in consumers pockets ... While the virus presents a risk, we do not expect it to meaningfully weigh on confidence in February.

The Conference Boards February report comes after the University of Michigans own closely watched sentiment index rose 1.1 points in February. While the two measures do not necessarily move in perfect lockstep, their trajectories tend to be similar.

The University of Michigans final revision for its February sentiment survey is due out Friday, with consensus economists expecting the index to be downwardly revised slightly to 100.7 from 100.9. At the time the first print was released earlier this month, the coronavirus was mentioned by just 7% of those surveyed when asked to explain their economic expectations.

On Thursday, the U.S. Bureau of Economic Analysis will release its second estimate for fourth-quarter gross domestic product. Consensus economists expect the headline gauge of economic growth will remain unchanged, with GDP registering a 2.1% annualized, quarter over quarter increase.

Some economists, however, expect a mild downward revision.

We expect the BEA to lower its estimate for Q4 real GDP growth by 0.1 [percentage points] to 2.0%, Nomura economists wrote in a note Friday. Data on residential construction spending indicates a stronger increase in residential investment in Q4, relative to the BEAs estimates.

However, the January retail sales report included downward revisions to December and November data, suggesting that growth in personal consumption expenditures was likely less than the BEAs initial report, the economists continued. Moreover, incoming data on inventories suggest a small contribution from inventory buildup in Q4.

Low Section Of Young Man Holding Shopping Bags While Standing On Sidewalk

Additionally, one of the last economic data releases of the week will be personal consumption expenditures for January. Consensus economists expect headline PCE will have risen 1.8% over last year in January, picking up from Decembers 1.6% year on year pace.

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Core personal consumption expenditures, the Federal Reserves preferred inflationary gauge that strips out volatile food and energy prices, likely rose 1.7% over last year in January. This would mark a slight increase over Decembers 1.6% rise.

Ahead of the core PCE report, other data reports tracking price trends including the consumer price index (CPI) and producer price index (PPI) for January showed upticks in subcomponents that could also push up core PCE. In the CPI report, shelter inflation stabilized after three straight months of weakness, and the PPI report showed price increases in financial services and health-care prices.

A number of major retail names will report results this week, including Macys, JCPenney, TJX Companies, Best Buy, Home Depot and Lowes.

The results come on the heels of mixed to disappointing holiday sales and earnings results from big-box retailers including Target and Walmart, presaging potentially weaker results across the sector. And more broadly, the Census Bureaus January retail sales report revealed a 3.1% decline in sales at clothing and clothing accessory stores, underscoring pockets of weakness for department stores and other apparel retailers.

Other retailers outside of these spaces could fare better, however. Low interest rates, coupled with unseasonably warm weather in December and January, led to a much better-than-expected pick-up in the U.S. housing market, creating a potential tailwind for companies including Home Depot and Lowes. Each has so far outperformed against the S&P 500 for the year to date.

As of Friday, companies comprising more than 90% of the S&P 500s market capitalization had reported fourth quarter results. Earnings at that point had beaten on average by 4.7%, with 63% of companies topping their own bottom-line guidance, according to an analysis from Credit Suisse analyst Jonathan Golub. That compares with 5.2% and 71% over the past three years, he said.

Monday: Chicago Fed National Activity Index, January (-0.16 expected, -0.35 prior); Dallas Fed Manufacturing Index, February (0.0 expected, -0.2 prior)

Tuesday: FHFA House Price Index, December month on month (0.4% expected, 0.2% prior); S&P CoreLogic 20-City home price index, December month on month (0.45% expected, 0.48% prior); Conference Board Consumer Confidence, February (132.1 expected, 131.6 prior); Richmond Fed Manufacturing Index (13 expected, 20 prior)

Wednesday: MBA mortgage applications, week ended Feb. 21 (-6.4% prior); New home sales, January (710,000 expected, 694,000 prior)

Thursday: GDP annualized quarter on quarter, second print 4Q19 (2.2% expected, 2.1% prior); personal consumption, second print 4Q19 (1.8% expected, 1.8% prior); core personal consumption expenditures, second print 4Q19 (1.3% prior); Durable goods orders, January preliminary (-1.5% expected, 2.4% prior); Non-defense capital goods orders excluding aircraft, January preliminary (0.2% expected, -0.8% prior); Initial jobless claims, week ended February 22 (211,000 expected, 210,000 prior); Continuing jobless claims, week ended February 15 (1.726 million prior); Pending home sales month on month, January (2.0% expected. -4.9% prior); Kansas City Manufacturing Activity Index, February (-1 expected, -1 prior)

Friday: Advanced goods trade balance, January (-$68.5 billion expected, -$68.3 billion prior); Wholesale inventories, January preliminary (-0.2% prior); Personal income, January (0.3% expected, 0.2% prior); Personal spending, January (0.3% expected, 0.3% prior); PCE deflator month on month, January (0.1% expected, 0.3% prior); PCE deflator year on year, January (1.8% expected, 1.6% prior); PCE core deflator year on year, January (1.7% expected, 1.6% prior); MNI Chicago PMI, February (46.3 expected, 42.9 prior); University of Michigan Sentiment, February final (100.6 expected, 100.9 prior)

Monday: Shake Shack (SHAK), Palo Alto Networks (PANW), Intuit (INTU), HP Inc. (HPQ), Hertz (HTZ) after market close

Tuesday: Home Depot (HD), Macys (M) before market open; Virgin Galactic Holdings (SPCE) Salesforce (CRM), Smile Direct Club (SDC), GW Pharmaceuticals (GWPH), WW International (WW), Planet Fitness (PLNT), The RealReal (REAL) after market close

Wednesday: Lowes (LOW), The TJX Companies (TJX), Wendys (WEN), Papa Johns (PZZA) before market open; Square (SQ), Etsy (ETSY), Booking Holdings (BKNG), Marriott International (MAR), Nutanix (NTNX) after market close

Thursday: Cronos Group (CRON), Best Buy (BBY), Crocs (CROX), ABInBev (ABI.BR), JCPenney (JCP), Sage Therapeutics (SAGE), TD Ameritrade (AMTD) before market open; Beyond Meat (BYND), iQIYI (IQ) Workday (WDAY), Dell Technologies (DELL), Autodesk (ADSK), VMWare (VMW), AMC Entertainment (AMC) after market close

Friday: Wayfair (W), Foot Locker (FL), Greenlane (GNLN) before market open

Emily McCormick is a reporter for Yahoo Finance.Follow her on Twitter: @emily_mcck

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Coronavirus, consumer sentiment, GDP, retail earnings: What to know in the week ahead - Yahoo Finance