The Repertoire Of Independence Day Week

The shortened week had a few events on the economic and policy fronts. There was only a few corporate news, including Levi Strauss & Co LEVI that reported fiscal second-quarter earnings along with Costco Wholesale Corporation COST. On the same day, Stellantis N.V. STLA hosted an investor event, the EV Day 2021.

Monday

The U.S. stock markets closed on Monday due to Independence Day.

Tuesday

On July 6^th, there were two reports. The Institute for Supply Management released its Services Purchasing Managers' Index for June whereas the Reserve Bank of Australia will announce its monetary-policy decision, as parts of the country have entered lockdown again to fight the Delta variant of Covid-19.

Wednesday

On July 7^th, the Federal Reserve's monetary policy committee published minutes from its eventful mid-June meeting, when officials signaled that interest rates would rise sooner and faster than Wall Street had expected, with inflation rising at its fastest pace since 2008.

The BLS released the Job Openings and Labor Turnover Survey for May with economists forecasting the figure to match the one from April which was the highest since the data were first collected in December 2000.

The Mortgage Bankers Association reported on mortgage applications for the week ending on July 2^nd. Supply constraints have pushed home-price growth to record levels, with mortgage applications declined 6.9% last week and falling during four of the past six weekly surveys.

Thursday

Levi Strauss' Growth Rebound

Investors expected plenty of good news in Levi's second-quarter report that was a test for the recent shares rally. Expectations ran high, especially after management lifted its outlook and raised the dividend in early April. Sales were expected to make a dramatic return to positive territory, with revenue surging 150% compared to the pandemic-disrupted period a year earlier. In April, CEO Chip Bergh revealed the retailing business is experiencing "faster-than-expected recovery" so investors are optimistic for a good reason.

The big questions heading into last week's announcement included whether Levi's avoided supply chain challenges that caused rising costs for Nike NKE and Lululemon Athletica LULU. But both of them were able to pass along price increases while keeping inventory levels in check, with profitability rising even as apparel giants were forced to rely on more expensive air freight.

Levi's gross profit margin will be the number to watch moving forward as profitability hit a new record last quarter thanks to the combination of rising prices and the shift toward e-commerce sales. Assuming Levi's supply chain held up through the period, another record could be in the cards.

Most Wall Street pros are predicting sales will rise about 33% in fiscal 2021 after having declined 23% last year. The hope is not only a return to setting new sales records but doing so at higher profitability due to a positive selling environment. This week's report should describe some of the best growth and earnings trends that Levi has ever posted.

Costco's June Sales

Investors will be eagerly following that report on guard for a growth slowdown as the prior report did not have such issues, with sales spiking 24% following a similarly strong period last year. The world's second-biggest retailer is enjoying sustained demand spikes despite consumer spending patterns shifting away from essentials and toward more discretionary purchases, such as electronics and home furnishings.

The retailer's June results could set the tone for the stock heading into the summer selling season with investors are currently expecting revenue to rise by 11% in the quarter that will end in August.

Stellantis' EV Day

The automobile manufacturer formed earlier this year via the merger of Fiat Chrysler Automobiles FCAI and Peugeot presented its electrification strategy to its investors.

The Federal Reserve will report on consumer credit data for May. Back in April, total outstanding consumer credit was a record $4.24 trillion as the continued reopening of the economy and hot housing market fueled shoppers to take on more debt. The Department of Labor will report initial jobless claims for the week ending on July 3^rd.

Friday

Italy hosted a G20 summit of finance ministers and central bank governors after 130 countries representing more than 90% of global GDP backed a minimum global corporate tax rate last week after two days of negotiations in Paris. The event ran from July 9th to July 10^th, with U.S. Treasury Secretary Janet Yellen pushing for a global minimum corporate tax rate of at least 15% on behalf of the Biden administration.

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