This week ahead || May 15th - May 19th 2023
Here's what you need to know for the week ahead.
Retail sales and superstore earnings: What to know this week
This week, investors will be closely watching monthly retail sales and quarterly results from major retailers such as Walmart, Target, Home Depot, and Alibaba. Retail sales are expected to have grown by 0.8% in April after falling 1% in March. In addition, investors will keep an eye on debt ceiling developments in Washington and former top executives at Silicon Valley Bank and Signature Bank testifying before the Senate. The S&P 500 finished last week lower despite inflation rising at its slowest annual rate in two years. Investors will focus on how companies began the year and management teams' comments on consumer trends in the current quarter. Trade downs from higher income consumers, inventory levels, and current-quarter trends will be the focus for investors during retail earnings reports this week.
Read about it here.
Amid banking woes, faltering US small-caps offer ominous economic sign
The US small-cap Russell 2000 index is down about 1% year-to-date, compared to a rally in the S&P 500 that has boosted larger US companies 7% year-to-date. The weakness in shares of smaller companies, which tend to derive profits domestically and are more vulnerable to economic shifts than larger firms, is one of several signs that investors are uneasy about the economic outlook. Investors fear that smaller firms will be hit hard by a potential lending slowdown that could weigh on the broader economy, and some market participants believe the Fed's recent rate hikes will only begin to impact the economy.
Read about it here.
This week in tech: Google flexing AI muscle; PayPal takes it on the chin
Google's parent company, Alphabet, has revealed it is integrating artificial intelligence (AI) capabilities into its Google search, Gmail, and Google Photos. At its annual I/O conference, the company announced that its new Google search product, Search Generative Experience, would be able to verbally answer search queries alongside producing relevant links, and will be available via waitlist for US customers over the coming weeks. The announcement followed Microsoft's $10bn investment in ChatGPT and its integration into the tech giant's Bing search product. Alphabet shares rose 4% during the Wednesday session and were up nearly 12% for the week.
Read about it here.
This week in EVs: Tesla's lithium gambit, GM restructuring, TuSimple in trouble
Tesla broke ground on a new lithium refinery in Texas, aiming to produce enough of the battery metal to build about one million vehicles by 2025, making it the largest lithium processor in North America. With its Texas facility reaching a 5,000-unit weekly production rate for the Model Y, Tesla is in need of the materials. Fisker and Lucid both fell short of expectations, with Fisker cutting production targets in the face of supply-chain constraints. Rivian and Li Auto impressed investors and industry analysts with their earnings releases, while General Motors consolidated its North American sales operations for commercial vehicles under a new brand called GM Evolve. TuSimple ended its week in a hole after receiving a delisting notice from the Nasdaq.
Read about it here.