What to Expect in the Week Ahead (WMT, TGT, CSCO and BABA Earnings; Inflation Data)

Walmart is expected to announce its third-quarter earnings on Thursday, November 16th before the market opens. The company is anticipated to deliver stable results following a successful second quarter, during which it successfully attracted more budget-conscious customers.

Walmart itself has guided for 3Q earnings per share (EPS) of between $1.45 to $1.50, little changed from $1.50 last year.

Alibaba is set to announce its earnings before the market opens on Thursday, providing investors with an opportunity to evaluate the company's focus on operating efficiency this year. Analysts anticipate that the Hangzhou-based firm will report third-quarter earnings of $2.12 per share on revenue of $30.79 billion, a significant improvement over the loss of approximately $1.06 per share and revenue of $28.42 billion in the same period last year.

The strong start to November for the stock market may face a significant challenge next week, as investors scrutinize October's inflation data to evaluate whether the Federal Reserve will continue raising interest rates and consider the possibility of another government shutdown.

Investors are anticipating that the headline CPI number, which is set to be released on Tuesday, will indicate a decrease in inflation last month, which would have positive implications for the stock market. According to economists polled by FactSet, US inflation is projected to have increased only 0.1% last month and 3.3% from the same period of the previous year. This pace is slower than what was observed in September when inflation rose by 0.4% on a monthly basis and 3.7% on an annual basis.

But investors will look for further improvement in the so-called core CPI number, which excludes volatile food and energy prices and is given more weight by policymakers. It's anticipated to show a rise of 0.3% on the month and 4.1% on the year, according to FactSet, in line with the prior month's reading.

In addition to the CPI data, investors will be keeping an eye out for the October retail sales data, which could provide some insights into consumer behavior in the face of higher interest rates and inflation. Despite these headwinds, consumers have remained resilient thus far. However, the upcoming data release on Wednesday is expected to reveal a decline in spending, indicating that the long-term effects of tightening monetary policy are finally being felt. According to economists surveyed by FactSet, retail sales are predicted to have decreased by 0.1% in October, marking a significant drop from the previous month's increase of 0.7%.