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The consumer will be in focus next week as investors head into the thick of earnings season and await some major macroeconomic reports. So far, just 14% of S & P 500 companies have reported earnings results. But investors are about to get a flood of reports in the week ahead, when they see results from roughly 20% of the index, with 30% more to come the following week. As one strategist noted, Wall Street is about to get insight into the economy from more than half the broad market index. The results could give investors a key piece of information. Now that it appears inflation is indeed easing from its highs, many have turned their attention to the consumer to understand just how soon the Federal Reserve lower rates to avoid a potential break in the economy. With some recent signs of slowing growth, corporate results and commentary could give investors clearer insight into how the consumer is holding up. For investors, that could determine what happens next for markets. This week, the S & P 500 dropped as investors pivoted away from the mega-cap tech leaders into this year’s market laggards such as small-caps. On Friday, Nvidia posted a more than 8% loss on the week, while the small-cap Russell 2000 outperformed the three major indexes, up 1.7%. .RUT 5D mountain Russell 2000 Investors are deliberating whether those moves are a sign of a rotation trade that could broadly lift the market, or a sign of a correction around the corner as the tech sector buckles. Some expect that stocks are due for near-term volatility, but can pull through higher toward the end of the year. “We’re probably due for a pause from equities and probably go sideways,” said Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group. “That’s not to say that a bear market is here. It’s just to say that we’re probably due for a little backing and filling until we get closer to October, and then visibility for the new year.” On Friday, the S & P 500 notched its worst week since April, down nearly 2%. The Nasdaq Composite slid more than 3%. The Dow Jones Industrial Average was the only one to close out the week with gains, up 0.7%. The thick of earnings Earnings season is off to a strong start. Of the 14% of S & P 500 companies that have reported results, roughly 82% have posted positive surprises. Bank results — which investors have continued to scrutinize after last year’s crisis in regional institutions — are mostly over with, with the firms themselves largely coming out unscathed. But more companies tied to the consumer are reporting in the week ahead, including some notable names that could give insight into the housing sector. Results from commercial real estate firm CBRE are on deck, as is paint and coating maker Sherwin-Williams and appliance manufacturer Whirlpool. Those names could give clarity into a critical component of inflation that makes up a major part of the consumer price index and the personal consumption expenditure report. While housing has recently started showing some signs of cooling, investors would want further confirmation that it’s pulling back from its highs. “It’s a major component of household worth and the state of the…
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Read More: Earnings plus key reports on economic growth and inflation put the consumer in