Markets This Week: Powell, Housing & Retail Earnings

What to Expect in the Markets This Week: Fed Chair Powell's Jackson Hole Speech, US Home Sales Data, Walmart and Home Depot Earnings (August 18-24, 2025)

Introduction

Hey there, fellow market watchers! As we kick off the week of August 18, 2025, the financial world is buzzing with anticipation. With inflation cooling but labor markets showing signs of strain, investors are on edge about potential interest rate cuts. This week packs a punch with Fed Chair Jerome Powell's highly awaited speech at the Jackson Hole Economic Symposium, crucial home sales data that could signal the health of the housing sector, and earnings reports from retail giants Walmart and Home Depot. Plus, we're still feeling the ripples from John Deere's recent earnings surprise—and not in a good way.

Whether you're a seasoned trader or just dipping your toes into stocks, these events could sway everything from bond yields to consumer discretionary shares. In this post, we'll break it all down with in-depth analysis, stats, and actionable tips to help you navigate the volatility. Let's dive in and see how these developments might impact your portfolio.

(For more on how Fed policies shape markets, check out our internal guide: Understanding Federal Reserve Decisions and Their Market Impact.)

Key Economic Events Overview for August 18-24, 2025

Before we zoom in, here's a quick snapshot of the week's highlights based on the latest economic calendars. This lineup could drive market sentiment, especially as traders parse clues on monetary policy and consumer spending.

Tuesday, August 19, 2025 – Home Depot reports Q2 earnings before the market opens. Also, housing starts data at 8:30 AM ET, which ties into broader home sales trends.
Wednesday, August 20: FOMC minutes from the July meeting at 2:00 PM ET—expect scrutiny for rate cut hints.
Thursday, August 21: Existing Home Sales for July at 10:00 AM ET; Walmart Q2 2025 earnings before market open; Jackson Hole Symposium kicks off.
Friday, August 22: Fed Chair Powell's keynote speech at Jackson Hole around 10:00 AM ET.
Monday, August 25, 2025 – July New Home Sales released at 10:00 AM ET.

These events aren't isolated—they interconnect. For instance, weak home sales could amplify calls for rate cuts during Powell's remarks. Keep an eye on authoritative sources like the Federal Reserve's website for live updates (external link: Federal Reserve Economic Data).

Fed Chair Jerome Powell's Remarks at Jackson Hole: A Pivotal Moment for Monetary Policy

The Jackson Hole Economic Symposium, hosted by the Federal Reserve Bank of Kansas City, is like the Super Bowl for economists and investors. This year's event runs from August 21-23, with the theme "Labor Markets in Transition." Powell's speech on Friday, August 22, is the main event, and markets are pricing in high expectations for signals on interest rate cuts.

What to Watch For in Powell's Speech

Powell has used Jackson Hole in the past to set the tone for Fed policy. In 2022, he channeled former Fed Chair Paul Volcker, vowing to crush inflation at all costs. This year, with inflation nearing the 2% target and unemployment ticking up to 4.1% in July 2025, analysts expect him to pivot toward supporting jobs while keeping inflation in check.

Key themes might include:

The effectiveness of current monetary policy in a transitioning labor market.
Hints on a September rate cut—markets are betting 100% on at least a 25-basis-point reduction, per CME Fed Watch Tool.
Risks from tariffs and geopolitical tensions, which could stoke inflation anew.

If Powell sounds dovish (favoring cuts), expect a rally in stocks and bonds. A hawkish tone could trigger sell-offs.

Potential Impact on Interest Rates and Markets

A signal for cuts could lower Treasury yields, boosting growth-sensitive sectors like tech and real estate. For example, the 10-year Treasury yield is hovering around 3.8% as of August 18, down from 4.5% earlier this year. Conversely, if he tempers expectations, volatility could spike—think VIX jumping above 20.

Practical example: In 2023's Jackson Hole, Powell's balanced remarks led to a 1.5% dip in the S&P 500 intraday, but it recovered as cuts materialized later.

Historical Context and Past Speeches

Since 1978, Jackson Hole has stood as a barometer for monetary policy direction. Powell's 2020 speech introduced flexible average inflation targeting, reshaping Fed strategy. His term expires in May 2026, making this year’s meeting potentially his final one as Chair and lending it added weight.

Actionable Advice for Investors

Diversify: If you're bullish on cuts, consider ETFs like the Vanguard Real Estate ETF (VNQ) for housing exposure.
Hedging: Use options to protect against volatility—buy puts on the SPY if Powell surprises hawkishly.
Stay Informed: Tune into the live stream on the Kansas City Fed's site and cross-reference with Bloomberg analysis for balanced views.

(Link to related article: How Central Bank Speeches Move Markets.)

US Home Sales Data: Gauging the Pulse of the Housing Market

The housing market remains a key economic indicator, reflecting consumer confidence, interest rates, and inflation. This week, the Existing Home Sales report drops on Thursday, August 21, with New Home Sales following on Monday, August 25. With mortgage rates steady around 6.7%, buyers are cautious, but inventory is rising—offering some relief.

Existing Home Sales Report (August 21)

Economists expect July sales to come in at 3.92 million units annually, just below June’s 3.93 million. This would mark a 2.7% monthly decline, continuing a trend of subdued activity.

Why it matters: Existing homes make up 90% of the market. A miss could pressure homebuilder stocks like Lennar (LEN).

Current Trends and Statistics

Inventory Surge: Active listings hit over 1.1 million in early August, up 15% year-over-year, but still below pre-pandemic levels.
Price Cooling: Median home price dipped to $410,800 in Q2 2025 from $423,100 in Q1, signaling affordability improvements in some regions like the South.
Regional Variations: Hot markets in Florida are cooling, while Midwest cities see steady demand.
New Listings Stall: Sellers are holding off, waiting for better prices, leading to a 2% drop in new for-sale homes last week.

For new homes, June sales were 627,000 units, with median prices at $401,800—expect similar for July.

Implications for the Economy and Stocks

Weak sales could reinforce rate cut bets, benefiting REITs and mortgage lenders. But if data beats expectations, it might delay cuts, hurting rate-sensitive sectors. Example: In June 2025, softer sales led to a 2% drop in the iShares U.S. Home Construction ETF (ITB).

Actionable tip: If you're investing in housing, look at diversified funds like the SPDR S&P Homebuilders ETF (XHB). Monitor NAR reports for primary data.

(Internal link: 2025 Housing Market Forecast: Trends and Predictions.)

Home Depot Q2 Preview: Bracing for a Tough Home Improvement Cycle

Home Depot reports Q2 results on Tuesday, August 19, before the bell. As the world's largest home improvement retailer, its performance offers a window into consumer spending on big-ticket items amid high rates.

Expectations and Key Metrics

Analysts project EPS of $4.71, down from $4.67 last year, with revenue at $42.5 billion (flat YoY). Comparable sales are expected to rise 1%, driven by a 3.2% increase in transactions.

Watch for:

Gross margins: Targeted at 33.5%, impacted by supply chain costs.
Pro segment sales: Pros (contractors) account for 50% of revenue—any slowdown here could hurt.
For fiscal 2025, the company forecasts 2.8% sales growth alongside 13 new store launches.

Factors Influencing Performance

High mortgage rates have delayed home projects, but falling lumber prices (down 10% YoY) could boost margins. In Q1 2025, sales reached $39.9 billion, topping estimates, though comparable sales declined 2.8%. Competition from Lowe's and online players like Amazon adds pressure.

Stock Analysis and Investor Tips

HD stock is up 5% YTD but trades at a P/E of 24, above the sector average. A beat could push shares toward $400; a miss might drop to $340 support.

Advice:

Buy on dips if guidance is strong—target entry below $350.
Diversify with peers: Consider Lowe's (LOW) for comparison, reporting later.
Use options: Sell covered calls for income if you hold shares, yielding 2-3% extra.

(External link: Home Depot Investor Relations. Internal: Retail Earnings Strategies for Investors.)

Walmart Q2 Earnings Preview: Consumer Resilience in Focus

Walmart reports earnings on Thursday, August 21, before the market opens. As a bellwether for consumer spending, its results could test the soft-landing narrative.

Expectations and Key Metrics

Consensus calls for EPS of $0.73 (up from $0.67), with revenue at $175.89 billion (5% growth). E-commerce sales are projected up 20%, fueled by Walmart+ memberships.

Key watches:

Same-store sales: Expected +4.5%, driven by groceries (70% of revenue).
Operating margins: Aiming for 4.2%, helped by ad revenue and supply efficiencies.
Guidance: FY2025 sales growth now 3.75-4.75%, adjusted EPS $2.35-2.43.

Factors Influencing Performance

Inflation-weary shoppers are trading down to Walmart for value, boosting traffic. In Q1, Walmart posted 4.8% sales growth, though tariffs remain a risk given its heavy reliance on imports from China. Example: In FY2024, e-commerce hit $100 billion, a milestone.

Stock Analysis and Investor Tips

WMT shares are up 25% YTD, with a P/E of 42—rich but justified by stability. A strong report could lift to $80; weakness might test $70.

Tips:

Long-term hold: Dividend yield 1.2%, consistent payer.
Pair trade: Buy WMT, short more cyclical retailers if consumer data weakens.
Monitor post-earnings: Conference call at 7:00 AM ET for tariff comments.

(External: Walmart Corporate Site. Internal: Investing in Consumer Staples During Uncertainty.)

Deere Earnings Top Forecasts, But Stock Tanks on Weak Guidance

Last week's Deere Q3 earnings (reported August 14) are still echoing through markets, especially in ag and industrials. Despite topping estimates, shares dropped 8%, reflecting a “buy the rumor, sell the news” reaction.

Earnings Breakdown and Stock Reaction

Deere posted EPS of $4.75 (vs. $4.63 expected) and revenue of $10.36 billion (vs. $10.31B). Net income fell 26% YoY to $1.289 billion due to weak farm demand.

Why the dive?

Outlook cut: FY2025 net income is now projected at $4.75 billion, down $100 million, with tariffs expected to impact $600 million.
Segment declines: Production & Precision Ag sales down 20%, Small Ag & Turf down 15%.
Broader woes: Farmer incomes are squeezed by low commodity prices, leading to deferred equipment buys.

Stock reaction: DE closed down 7.95% on heavy volume, wiping out $5 billion in market cap.

Implications and Lessons

This highlights how forward guidance trumps backward-looking beats. Tariffs, mentioned repeatedly, tie into election risks—expect more volatility if trade wars escalate.

Actionable:

Avoid chasing: Wait for stabilization around $350 support.
Opportunities in AI: Deere's precision ag tech (e.g., AI-driven tractors) could be a long-term play.
Diversify: Pair with Caterpillar (CAT) for industrial balance.

(Internal link: Analyzing Earnings Surprises in Industrials.)

Other Notable Market Movers This Week

Don't sleep on FOMC minutes (Wednesday)—they could preview Powell's tone. Global events like Canada inflation data might influence cross-border trades. Overall sentiment: Bullish on cuts, but cautious on recession fears.

Conclusion: Positioning Your Portfolio for the Week Ahead

This week could be a turning point: Powell's remarks might solidify rate cut bets, home sales could confirm housing resilience, and retail earnings will test consumer strength. Deere's miss serves as a reminder—look beyond headlines to guidance and macro risks.

In summary, expect volatility but opportunities in defensive plays like Walmart. Stay diversified, use stops, and monitor real-time data.

Ready to dive deeper? Subscribe to our newsletter for weekly market updates and exclusive tips. What are your predictions for Powell's speech? Drop a comment below!

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