As stocks recover from last week’s selloff, it’s becoming increasingly clear that investors’ priorities have shifted. They’re no longer quite as concerned about inflation. Instead, their focus has shifted to the state of the economy.
To that end, investors will receive a flurry of U.S. economic data helping to illuminate the state of the economy and labor market, starting with retail sales at 8:30 a.m. Eastern Time Thursday. Other readings include jobless benefit claims and industrial production data, according to Tom Essaye, founder of Sevens Report Research.
The best case scenario for stocks, according to Essaye, would be the data coming in soft, but not too soft. Notably, weekly jobless claims reports have had major market-moving impact over the past couple of weeks.
“Economic growth is now the main fundamental driver of this market and today is full of important growth updates including, in order of importance: Retail Sales (E: 0.3%), Jobless Claims (E: 234K), Industrial Production (E: -0.1%), Philly Fed (E: 5.8), Empire Manufacturing (-6.0) and Housing Market Index (E: 42). In-line to slightly underwhelming economic data will be the ‘best case’ for stocks in the near term as it increases 50 bps rate cut chances but doesn’t imply a dramatic growth slowdown,” Essaye wrote in a report shared with MarketWatch early Thursday.