Hickey and Walters (Bespoke) submit: In terms of economic reports, tomorrow is one of the busier days of the week with four reports.
Following this week's earnings warnings from Home Depot (HD) and Sears Holding (SHLD), investors will most likely be paying closest attention to the Retail Sales report for June. We analyzed prior reports and found that it most often comes in weaker than expected, with a frequency of nearly 48%.
As far as the market's reaction is concerned, the table below summarizes the typical volatility as well as the average S&P 500 and sector performance under each of the possible three scenarios. When retail sales come in stronger than expected, the S&P 500 tends to do best with an average gain of 0.20%, while a weaker than expected report results in an average decline of 0.10%.
In terms of individual sectors, technology tends to be the best performer following a stronger than expected report, while energy does the worst. When the report is weaker than expected, technology does the worst, while telecom services does best.