Empire State Number Highest in 4 Years

This week, we transfer focus to “Retail Earnings Week,” where the biggest of the big-box retailers report quarterly earnings. It also signifies earnings season overall nearing its end until we pick up calendar Q3 earnings season this fall. We also have a full palate of economic reports throughout the week, from housing to manufacturing to weekly jobless claims.

Otherwise, we see spot oil prices up roughly +5% from a week ago, at $82 per barrel (/bbl) on WTI (the domestic print) and $88/bbl on Brent crude (international). With a choked-off Strait of Hormuz for more than half of 2026 so far, global oil reserves are running thin. Strategic Petroleum Reserves (SPR) in the U.S. are currently sub-300 million barrels, a level we’ve not seen since the 1980s. Even more importantly, a peace agreement between the U.S. and Iran remains elusive presently.

Empire State Strongest Month in 4+ Years

A surprise jump in Empire State Manufacturing for August — a productivity read from the third-largest economy among U.S. states, after California and Texas — welcomes investors this morning: +20.6 nearly doubles the +12 anticipated and higher than the unrevised +15.6 reported for July. This is the strongest level of 2026 so far (+19.6 in May), and the strongest print for this survey since December of 2021.

We shall see if this level of manufacturing growth is sustainable for the near term. Empire State numbers (along with Philly Fed, which reports later this week) tend to bounce around a bit: we saw -0.2 in May and -7 in September of last year. Inventories are lowering in this data set as well, with unfilled orders climbing and input price pressures heating up.

Retail Earnings This Week: WMT, HD & More

We don’t see any big-box retailers reporting today, but over the course of the week we have hundreds of billions in revenues to be accounted for. Tomorrow we see Home Depot HD results, while Wednesday brings us Lowe’s LOW, Target TGT, TJX Companies TJX and Estee Lauder EL. On Thursday, we’ll see Walmart WMT, Ross Stores ROST and Alibaba BABA.

Of these, only Target has a Buy rating (Zacks Rank #2); the rest are Zacks Rank #3 (Hold) or Zacks Rank #4 (Sell). The biggest year-over-year earnings gain is expected from Estee Lauder (which would make Fed Chair Kevin Warsh, who is married to the heir of this company, happy) at +255%; Alibaba represents the other side of that coin, with -5.8% earnings growth expected.

What to Expect from the Market This Week

Throughout the course of this week, we will see a plethora of economic data. We are sandwiched between “Inflation Week” last week (CPI and PPI) and next week’s Personal Consumption Expenditures (PCE), with “Jobs Week” following that. But Housing Starts and Building Permits join Pending Home Sales later this week, along with Imports and Exports, Philly Fed, Leading Economic Indicators (LEI), flash Manufacturing/Services PMI and Jobless Claims.

Mid-week, we’ll see the release of the minutes from the most recent Federal Open Market Committee (FOMC) meeting from last month, where the split decision came to keep the Fed funds rate at its steady +3.50-3.75% range. Three dissenters voted to raise rates 25 basis points (bps) as inflation numbers had been marching higher. But as FOMC statements now eschew guidance or much description (likewise the press conferences featuring Fed Chair Warsh), we look toward these minutes for the level of discord among Fed members, to whatever extent it exists.

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