Pivotal Week for U.S. Retail Kicks Off on Right Foot: Will Earnings Follow Suit?

investing.com:

The pivotal week for US retail is underway. As key industry leaders unveil their financial performance, coupled with today's pleasantly surprising retail sales figures, a sense of optimism pervades the market.

In another notable development earlier today, Home Depot (NYSE:HD) managed to surpass earnings expectations, notwithstanding a decline in its sales figures.

Investors and analysts will now shift their attention to the upcoming financial reports from major market players including retail giants such as Walmart (NYSE:WMT) and Target (NYSE:TGT), technology stalwart Cisco (NASDAQ:CSCO), retail powerhouses TJX Companies (NYSE:TJX), and e-commerce titan JD.com (NASDAQ:JD).

The US retail sales data for the first half of 2023 presents a story of economic resilience. It commenced with a robust 3.2% surge in the opening month of the year. Although there was a modest contraction of nearly 1% in retail sales for February and March, a vigorous recovery emerged from April onward. July's data surpassed expectations with a 0.7% growth against the anticipated 0.4% rise.

This streak of four consecutive months of retail sales growth, notably exceeding expectations, underscores an unwavering spending trend that bolsters demand-driven inflation. Moreover, June's retail sales were revised from 0.2% to 0.3%.

The data showing an upward trend since the beginning of last year also supports the idea of putting aside concerns about a recession. However, there are still warning signs indicating the possibility of a recession.

Various campaigns aimed at boosting spending during the summer months have contributed to the increase in retail sales. Yet, there are forecasts suggesting that this spending momentum might not be sustained in the coming