What to know this week

The S&P 500 (^GSPC) closed above 5,000 for the first time on Friday as the three major averages posted a positive week for the 13th time in the past 14 weeks.

With few economic catalysts in the past week, investors have been digesting better-than-expected corporate results. Meanwhile, comments from Federal Reserve officials reiterated the central bank's stance that more confidence is needed in inflation's downward path.

This week will bring fresh challenges to the market rally, however, as fresh readings on inflation and consumer spending highlight the economic calendar. On the corporate side, about 15% of the S&P 500 is set to report earnings with John Deere (DE), Coinbase (COIN), Airbnb (ABNB) and Shopify (SHOP).

Price verification

Tuesday morning will bring investors the Consumer Price Index (CPI) for January. Wall Street expected a 2.9% annual gain for the headline CPI, which includes food and energy prices, down significantly from the 3.4% headline in December. Prices rose 0.2% on a month-over-month basis, in line with December's rise.

On a “core” basis that strips out food and energy prices, inflation is expected to have risen 3.7% year-on-year, a slowdown from the 3.9% increase seen in December. Monthly core price increases are expected to be unchanged from the previous month at 0.3%.

“We expect higher core commodity deflation this month, mainly driven by weaker used car prices,” Morgan Stanley economist Diego Anzotegui wrote in a note to clients on Thursday. “Gradual deceleration confirmed, but services inflation remains sticky, with some decline in rent inflation, but slight recovery in insurance prices and hotels.”

Consumer status

Part of the soft-landing thesis on markets over the past few months has been consistently stronger-than-expected data on consumer spending. A new reading on that trend is set to greet investors on Thursday, along with the January retail sales report. Economists had expected retail sales to fall 0.2% in January.

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Bank of America U.S. economist Michael Capen expects a “softer” print due to seasonal factors and widespread winter storms, which could disrupt retail spending in January. But Capen doesn't believe this changes the overall story for consumers.

“However, paring out the noise, the consumer remains healthy and spending risks are upside from accelerating real wages,” Capen wrote in a note to clients.

Capen notes the real wages metric Americans see after subtracting core inflation from their wage growth, recently listed in a Yahoo Finance chartbook, as the U.S. economy moves out of recession amid high interest rates.

The ultimate look at classic autos

Traditional automakers Ford ( F ) and GM ( GM ) surprised on the upside after Tesla's ( TSLA ) earnings report disappointed investors. Chrysler and Fiat parent Stellandis ( STLA ) is set to report on Thursday, the last Big Three automaker to report earnings this cycle.

Yahoo Finance Press Subramanian Reports: As the United Auto Workers (UAW) strike lasting until October hits operating margins, Stellandis expects revenue to rise 5% to 189.3 million euros, and net income to rise 9.7% year-on-year to 18.4 billion. Euros, according to Bloomberg estimates.

Stellandis CEO Carlos Tavares has been criticized in the past for not moving faster with the company's EV transition; Now that demand for EVs has waned in recent months, he's cautious. Shares of fellow Big Three automakers Ford and GM rose following strong earnings reports, as the two Michigan-based automakers' traditional gas-powered businesses forecast stronger profits for 2024.

Investors will look for Stellandis to deliver more with a view to seeing profit growth and controlling EV capital expenditures.

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Revenue breadth is widening

Broader earnings are increasingly positive. 75% of S&P 500 companies have Posting earnings, the benchmark index is on pace to report its second straight quarter of earnings growth. And, specifically, analysts see earnings growth continuing over the next two years.

In a note to clients on Friday, Deutsche Bank chief equity strategist Binky Chadha noted that 83% of US companies beat earnings estimates. That's the highest score in two years and “exceeds the upper end of the pre-pandemic range,” according to Sada's research. This is significantly higher than beat rates in other countries, which may be an indicator of why US stocks are outperforming other markets.

“Such high pulses have historically only been seen in the early stages of a recovery from a major cyclical downturn,” Sada wrote.

Several strategists recently noted a similar trend to Yahoo Finance, explaining how the S&P 500 could rise to new highs later this year without contributions from a handful of big tech stocks driving market action of late.

“As investors stop worrying so much about when the Fed is going to start cutting rates, I think we'll see many of these companies outside of the Magnificent Seven have strong earnings growth. Return,” Goldman Sachs equity strategist Ben Snyder told Yahoo Finance.

Weekly calendar

Monday

Economic Data: New York Fed One-Year Inflation Expectations, January (3.01% ago)

Revenue: Avis Budget Group (CAR), Monday.com (MNDY), Waste Management (WM), Zoominfo Technologies (ZI)

tuesday

Economic data: NFIB Small Business Confidence, January (91.9 previously) Consumer Price Index, month-on-month, January (+0.2% expected, +0.3% previously); Core CPI, month-over-month, January (+0.3% expected, +0.3% previously); CPI, year-on-year, January (+2.9% expected, +3.4% previously); Core CPI, year-on-year, January (+3.7% expected, +3.9% previously); Real Average Hourly Earnings, Year-over-Year, January (+0.8% prior)

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Earnings: Airbnb (ABNB), AutoNation (AN), Biogen (BIIB), Coca-Cola (KO), Datadog (DDOG), Hasbro (HAS), Instacart (CART), Marriott International (MAR), Lyft (LYFT), MGM Resorts (MGM), Moody's (MCO), Robinhood (HOOD), Shopify (SHOP), Upstart (UPST), Zillow Group (ZG)

Wednesday

Economic data: MBA mortgage applications, week ending February 9 (+3.7%)

Earnings: Albermarley (ALB), Cisco (CSCO), CME Group (CME), Generic (GNRC), Kraft Heinz (KHC), Occidental (OXY), Sony (SONY), Sunoco (SUN), Twilio (TWLO)

Thursday

Economic data: Initial jobless claims, week ended Feb. 10 (218,000 previously); Retail sales, month-on-month, January (-0.2% expected, +0.6% previously); Retail sales ex-auto and gas, January (+0.2% expected, +0.6% previously); Import prices, month-over-month, January (-0.1% expected, +0.0% previously); Export prices, month-over-month, January (-3.2% prior); Industrial production, month-over-month, January (+0.4% expected, +0.1% previously); NAHB Housing Market Index, February (44 ago)

Revenue: Applied Materials (AMAT), Coinbase (COIN), Crocs (CROX), DoorDash (DASH), Draft Kings (DKNG), John Deere (DE), Penn National (PENN), Oatly (OTLY), Roku (ROKU), Stellantis (STLA), The Trade Desk (TTD), TOAST (TOST), Wendy's (WEN), Yeti (YETI)

Friday

Economic data: Producer price index, monthly, January (+0.1% expected, -0.1% previously); PPI, year-on-year, January (+1% previously); University of Michigan consumer sentiment, February primary (79.0 expected, 79.0 previously); Building Permits Monthly, January (1.5% expected, 1.8% previously)

Earnings: Air Canada (ACDVF), Cinemark (CNK)

Josh Shaffer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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