Source: Sharecast
In the US, quarterly results from Autodesk, Dollar Tree, Costco and Best Buy will be eyed.
As far as Costco is concerned, AJ Bell analysts Russ Mould and Danni Hewson said the company continues to be "a real star" in the US retail sector as the shares trade close to record highs ahead of the latest quarterly results.
"In the second quarter, Costco beat expectations handily and the momentum looked to continue in April as the company reported strong monthly sales - suggesting its value credentials continue to resonate with customers," they said.
"Under CEO Ron Vachris, the company has navigated inflationary pressures and sustained a steady roll-out of new warehouses. Shareholders will be looking for signs this organic expansion is being sustained alongside the quarterly numbers.
"Key to justifying Costco’s bumper valuation is the company’s worldwide renewal rate and keeping it near the 90% mark. Costco sells goods as close to their wholesale cost as possible as a way of driving sales and makes the bulk of its returns on subscription fees. If renewal rates were to slump, it would hit the revenue and earnings visibility for which Costco has become so prized."
On the macro calendar, US inflation data for April will be among the highlights, in particular the core PCE price index.
David Morrison, senior market analyst at Trade Nation, said core PCE was the key data release this week.
"This has always been known as the Fed’s preferred inflation measure," he said. "But new Fed Chair Kevin Warsh is understood to favour a ‘trimmed mean’ version, which tends, typically, to be a smidge closer to the Fed’s 2% target rate. Mr Warsh has taken on this role at a difficult time.
"Before the war began at the end of February, the expectation had been that the Fed would cut rates by 50 basis points before year-end. Now, there’s no chance of any rate cuts, with the CME’s FedWatch Tool currently forecasting a 41% probability of a 25-basis point hike this year, along with a 14% chance of a second hike as well."
TD Securities expects core and headline PCE prices to have moderated in April to 0.26% and 0.43% month-on-month, respectively.
"Tariff passthrough was moderate in the month, and a slowdown in supercore services offset strength in shelter," it said. "Our forecast translates to 3.3% and 3.8% y/y for core and headline, respectively. We also look for nominal and real personal spending to slow down in the month."