Last week, a few economic reports surprised to the positive side. And this week is potentially very important for the market, says Christian Hill in Investor’s Daily Edge. Last week saw Factory Orders more than double expectations, and the ISM Services Index wasn’t nearly as low as was expected. Add this to the Fed standing pat and there could be some momentum heading into this week. This from Christian…

This week is very busy with 14 reports in four days, and things really get going this morning with the release of the July Retail Sales figures. The market expects a rather large jump this month. In June, the growth was an anemic 0.10 percent, but the market expects a growth of 0.50 percent in July. I guess only in this current economic state can a half-percentage point growth be big news, but it is a gain none the less.

The Core CPI and CPI figures come out simultaneously on Thursday morning. While both are likely to continue showing increases, the increases are slowing down. Core CPI, which excludes food and energy costs, is expected to increase 0.20 percent in July, versus 0.30 percent in June. CPI, which takes food and energy into consideration, is expected to increase by 0.40 percent. This marks a considerable drop from June, when the increase in CPI was 1.1 percent. This could be attributed to a drop in fuel costs, which declined from the middle of July until the end of the month.

The preliminary Michigan Sentiment Index figures for August come out Friday and indications are for a higher confidence reading than July. This index could indicate that the economy is gaining some momentum. If consumers start feeling better about the economy and think things are beginning to turn around, they will likely start spending more money. And if the retail sales figures for July increase, this could indicate just such a thing. Add to that only a slight increase in CPI, and things could begin to offer a glimmer of hope at a turnaround. Only time will tell, but we could be seeing a light at the end of the tunnel.

Earnings:
Tuesday: AMAT, NVDA, UBS
Wednesday: M (Macy’s)
Thursday: WMT

Source: A Critical Week For The Market To Build Momentum