WHAT HAPPENED THIS WEEK

After almost two months of declining prices at the pump, the national average price for a gallon of gas fell below $4 on Thursday for the first time since early March. The milestone for falling gas prices coincides with a slowdown in price increases for goods overall.

On Wednesday the consumer price index, CPI, rose 8.5% over the past year as of July. This was a notable slowdown from 9.1% in June, largely due to the decline in gasoline prices which make up a large portion of the CPI. 

All three major U.S. indices closed higher last week. For the S&P 500, it was the fourth winning week in a row, closing at 4,280.15, up 2.99% on the week.

Looking ahead to this week, retailer earnings will be in the spotlight. On Tuesday, Walmart, which previously slashed earnings forecasts, will give investors a look at the effects inflation and overstocked inventories are having on margins. Target reports Wednesday and Home improvement retailers Home Depot and Lowe’s report Tuesday and Wednesday, respectively.

In China early Monday morning, the government reported industrial production and retail sales growth that fell below analysts’ expectations. Investment in manufacturing slowed down, while a decline in real estate investment accelerated. US stock futures were down in the premarket trading.

Looking ahead to the week:

Tues Aug 16: Housing Starts, the slowing economy, combined with inflation and interest rates eroding consumer purchasing power, present large challenges for the housing market through the rest of the year.

Industrial Production Index, short term changes in industrial production expected at rise to 0.3%.

Wed Aug 17: Retail Sales, major focus this week with company earnings reports and retails sales number expected to reflect consumers response to previous rates hikes and speculation of further hikes in the coming months.

Thurs Aug 18: Initial Jobless Claims, expected to continue the previous week’s trend adding 265,000 new claims this week.