U.S. markets face economic data test as earnings calendar thins next week

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U.S. markets face economic data test

Highlights

Carnival, FedEx, and KB Home report next week as oil prices react to Hormuz supply increases and potential Iran peace progress could lower inflation.
Wednesday's new-home sales and Thursday's PCE price index releases are in focus for their impact on the Federal Reserve's rate outlook.
Micron Technology's post-close earnings on Wednesday are seen as the week's most significant as investor expectations for the memory chipmaker remain high.

Key reports and company updates in focus

As reported by CNBC, Jim Cramer says next week’s lighter earnings schedule is pushing market attention toward several economic releases and a small group of corporate reports with broader read-throughs for inflation, demand and growth.

He points to oil as one of the biggest themes to watch after crude exports through the Strait of Hormuz pick up and the U.S. Navy ends its blockade. If peace negotiations with Iran continue to progress, he expects sharply lower oil prices from the added supply, a move that could ease inflation pressures and eventually support lower interest rates.

On Tuesday, Carnival reports before the bell, offering a view on how the Iran war affects travel and how lower fuel costs could influence demand. After the close, FedEx reports, and Cramer remains positive on Chief Executive Raj Subramaniam’s network optimization and cost-cutting strategy, while KB Home is also due to report amid questions over how elevated interest rates are weighing on housing demand.

Inflation and housing data may shape rate outlook

Wednesday brings new-home sales data, which adds another signal on the weak housing market, an area Cramer argues deserves more attention from central bankers. After the close, Micron Technology reports results that he describes as the most consequential quarter of the week because expectations have risen significantly following the memory chipmaker’s strong run this year.

On Thursday morning, the personal consumption expenditures price index is due, a report Cramer sees as critical for the inflation outlook. He also highlights Darden Restaurants as a company that could benefit if falling gasoline prices leave consumers with more room to spend.

In our earlier article, we covered how the upcoming core PCE inflation report became a pivotal catalyst for markets after Fed Chair Kevin Warsh struck a more hawkish tone. We noted that the shift quickly lifted short-term Treasury yields and increased the probability of an October rate hike, keeping both stocks and bonds highly sensitive to any inflation surprise.

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