This week, investors will turn their attention to retail sales and retailer earnings data, as well as comments from U.S. Federal Reserve officials, including its head Jerome Powell, looking for clues about the future trajectory of interest rates. Friday’s rebound in the stock market late last week came amid hopes that the market was close to a bottom after a sharp decline, but the fall may not be over yet. Crypto investors will also be watching the aftermath of the massive decline. Meanwhile, UK inflation data is expected to show that consumer prices in the UK rose above 9% in April. Here’s what you need to know at the start of the week.

1. ECONOMIC DATA FROM THE USA

Economic data from the U.S. will be scrutinized this week as investors try to gauge whether the Federal Reserve’s sharp tightening of policy to curb rising inflation will lead to a hard or soft “landing” for the economy.

U.S. retail sales data for April, due out on Tuesday, is expected to show a strong increase thanks to solid auto sales. Economists forecast a 0.8% increase after a 0.7% rise in March, despite a rise in inflation.

The U.S. will also release regional data on manufacturing activity, as well as reports on housing construction and sales of completed homes. The housing market data is expected to “cool” as a result of the mortgage rate hike.

Fed Chairman Jerome Powell will speak on Tuesday and is expected to reiterate that the U.S. central bank will raise rates by half a percent at each of its next 2 meetings.

Other Fed speakers this week include New York FRB Chairman John Williams, St. Louis FRB Chairman James Bullard, Philadelphia FRB Chairman Patrick Harker and Chicago FRB Chairman Charles Evans.

2. RETAILER EARNINGS

In addition to economic data, investors will pay attention to retailers’ earnings reports during the week to see how much lower earnings could erode consumers’ purchasing power.

Walmart, the largest U.S. retailer, and home goods giant Home Depot are due to report first-quarter financial results before trading opens Tuesday. Target and Lowe’s are due to report before trading opens Wednesday, while Macy’s is due to report on Thursday.

Investors will be watching retailers’ outlook for the second half of this year especially closely amid heightened inflation, higher wages and fuel costs, and ongoing supply chain disruptions.

3. HAS THE MARKET HIT BOTTOM?

Wall Street closed in positive territory last Friday after another volatile week in the market as hopes that inflation may be near a peak were offset by fears that the Federal Reserve’s sharp tightening of policy could drive the economy into recession.

Despite Friday’s gains, the S&P 500 and NASDAQ Composite recorded their sixth straight weekly losses, while the Dow Jones Industrial Average recorded its seventh straight weekly decline.

Investors are looking for clear signs the market has bottomed amid concerns that the sharp selloff in stocks may not be over yet.

“I don’t think we’re out of the woods any time soon,” Mark Hackett, Nationwide’s head of investment research, told Reuters in an interview. – With that in mind, investor expectations have changed dramatically.”

Rather than looking for signs of a bottom in the market, Willie Delwiche, an investment strategist at research firm All Star Charts, told Reuters he was focused on clearer signs that the stock market could start a more sustained rally.

“There are too many people trying to find a bottom right now, and it’s proving futile and costly,” Delwiche said. – It’s a risk-off environment … Stepping aside and letting the volatility play out makes more sense for investors.”


4. CRYPTOCURRENCY COLLAPSE

Investors will be keeping a close eye on crypto assets this week after last week’s volatility, which was dominated by the collapse in the value of the Terra USD stablecoin, which broke its 1:1 peg to the U.S. dollar.

Stablecoins are tokens pegged to the value of traditional assets, most commonly the U.S. dollar, and are the primary means for moving money between cryptocurrencies or for converting balances into fiat money.

Last week, ratings agency Fitch said cryptocurrencies and digital finance could face “significant negative consequences” if investors lose confidence in stablecoins, as many regulated financial institutions have increased their presence in the sector in recent months.

Cryptocurrency assets have been gripped by a widespread sell-off in risky assets amid fears of higher inflation and interest rate hikes, but the broader financial market has yet to see the domino effect of a cryptocurrency crash. Fitch said weak links to the regulated financial market will limit the potential volatility in the cryptocurrency market, which could cause broader financial instability.

5. UK INFLATION SURGE

The UK will release its inflation data on Wednesday, which is expected to show that consumer prices jumped to an annualized rate of 9.1% in April, which would be the biggest jump in annual inflation since 1980 and the fastest rate of inflation since 1982.

The Bank of England said it expected inflation to jump above 10% in the fourth quarter when it raised interest rates earlier this month.

On Tuesday, U.K. employment data is expected to highlight tightness in the labor market, adding to pressure on wages and prices.

In the eurozone, European Central Bank chief Christine Lagarde will speak on Tuesday and the ECB will release the minutes of its latest meeting on Thursday.