Today Retail Earnings take pressure off the Fed

When Jackson Hole was becoming an obsession for Wall Street, this week’s retail earnings come to calm the waters and tell the market that the U.S. economy probably isn't cooling as hard and fast as it is believed. It's well known that the Trade War without a solution, the inverted yield curve, the fall in the yield of bonds globally (see graph) and, the threat of recession are factors that should scare any economy and regardless, the US consumer sector, key in every economy, seems to flow well.

Yesterday Home Depot HD was up 4% after good Q2 results reaffirming its guidance for this year. And today, at premarket, Target TGT exploits more than 18% after beat EPS and sales with a wide margin, with raises forecast and reaching all-time highs. The same happens today with Lowe LOW (+ 12%) another great retail chain, beats EPS and sales and affirms guidance.

The next data of Housing this week can reaffirm this perception of the US economy. Finally, the Fed now has less pressure (except Trump's tweets) to lower rates and this can be seen today that the FOMC Minutes begin and Friday with Powell in Jackson Hole.