Retail sales, Home Depot earnings, Baidu: 3 things to watch

Investing.com -- Stocks were muted on Monday as investors waited for a resolution of the debt ceiling stand-off in Washington, where lawmakers are supposed to meet again at the White House on Tuesday to hash out their differences. Lawmakers are pressing ahead as the deadline to get a deal done is swiftly approaching. Biden administration officials have warned that the government could run out of options to continue paying its obligations as early as June 1.

The drama is unfolding as the earnings season shifts into its retail phase. Target (NYSE:TGT) and Walmart (NYSE:WMT) lead the big retailers reporting next week, to be followed by others in the coming days. Analysts will be watching for what they say about consumer spending trends, amid signs that the economy is cooling.

Futures traders are expecting the Federal Reserve will pause on further interest rate increases in June as it assesses how effective its policy actions have been to date to bring down inflation toward its 2% goal without triggering a recession.

Still, some are forecasting an economic downturn this year that could encourage the Fed to reverse course.

Here are three things that could affect markets tomorrow:

1. Retail sales

Ahead of earnings reports from major retailers, the government releases retail sales data for April tomorrow at 8:30 ET (12:30 GMT). Analysts are expecting a gain of 0.8% from the prior month and 4.2% from the same month last year.

2. Home Depot earnings

Home improvement retailer Home Depot Inc (NYSE:HD) is expected to report earnings per share of $3.81 on revenue of $38.4 billion.

3. Baidu earnings

Chinese internet and artificial intelligence company Baidu Inc (NASDAQ:BIDU) is expected to report earnings per share of $12.26 on revenue of $30B.