Here are the 2 big things we're watching in the stock market in the week ahead

CNBC Finance

7 min read

First-quarter earnings season is winding down, but one Club name is set to report this week and several pieces of important economic data are on deck. Let's take a closer look. 1. Earnings: Qnity Electronics is our only stock on the earnings calendar, with results due out before the open Tuesday morning. Analysts expect Qnity to report earnings of 92 cents per share on revenue of $1.27 billion. Spun off from DuPont last year, Qnity is a picks-and-shovels play for the data center buildout, supplying a number of specialized materials and products used to make and package semiconductors. Given all we've heard this earnings season about the demand for AI computing power, we feel good about the numbers Qnity is set to report. No matter where the demand is â be it for central processing units (CPUs), Nvidia's graphics processing units (GPUs), or memory chips â it all bodes well for Qnity. The one area where we're prepared to see some weakness is in consumer electronics, where demand could take a hit due to the rapid rise in memory prices. When Qnity reported fourth-quarter numbers earlier this year, management detailed a multiyear transformation plan intended to simplify operations, enhance productivity, and cut costs, leading to a $100 million boost to its EBITDA (earnings before interest, taxes, depreciation, and amortization) run rate by the end of 2028. On the call, we'll be interested to hear how the plan is progressing and if the team has uncovered any additional areas for improvement that could result in an increase to that $100 million target. Finally, we're mindful of the stock backdrop. Qnity shares are trading near all-time highs and up 80% year to date, so expectations are high, and any signs of imperfection could be met with profit-taking. Q YTD mountain Qnity's year-to-date stock performance. 2. Economic data: This week is all about affordability on Main Street. The April consumer price index (CPI) is out Tuesday. On the headline number, economists polled by FactSet expect to see a 3.7% year-over-year increase â a sizable acceleration from the 3.3% reading in March amid soaring energy prices tied to the Iran war. Core CPI, which excludes more volatile food and energy prices, is expected to be up 2.7% year on year. That would be a modest pickup from 2.6% in March. Drilling into the report, we'll be keeping a close eye on the shelter index as affordability continues to be an issue plaguing Americans. The March report brought some good news on this front. Shelter was up 3% annually, matching its lowest reading since August 2021, and 0.3% on a monthly basis. Shelter is important to watch because housing payments usually represent the largest, unavoidable cost taken out of consumer wallets. While higher prices are felt by everyone, it's the lower-income cohort that especially feels the impact because they end up spending a relatively higher percentage of their money on items like shelter, household staples, and other unavoidable costs, like gasoline. Nevertheless, even if higher-income folks can more readily absorb the costs, they aren't immune to the emotional swings of swift price increases. That was on display Friday, when the University of Michigan's consumer sentiment report fell to a record low in May. The morning after the CPI report, the April producer price index (PPI) is due out. It's not as closely scrutinized as the CPI report, but we always pay attention to PPI because it represents the change in prices that producers receive for the goods they sell. If a steelmaker is being paid more for its hot-rolled steel, that means its customers, such as a farm-equipment maker, are seeing their costs go up. The customer can deal with rising prices for its inputs in one of two ways. Generally, they will try to avoid passing costs through to the consumer for a while. But eventually, if the inflation is too much to bear, they will have to pass through those costs to protect profit margins. As a result, PPI can help determine the likelihood of higher consumer prices in the future, making it a leading indicator for the CPI. Remember, the Federal Reserve is mostly concerned with the consumer pays as it sets monetary policy. That's why the core CPI and especially the core personal consumption expenditures (PCE) index capture more of the market's attention. The PCE is the Fed's preferred inflation gauge and it typically comes out about two weeks after the CPI. The Fed is soon to undergo a change at the top with Kevin Warsh set to replace Jerome Powell as chair. The April jobs report on Friday came in stronger than expectations, and inflation is still running comfortably above the Fed's 2% target. That muddies the path to rate cuts in the short term. Of course, what prices are doing and what consumer sentiment looks like doesn't always tell the full picture of how the consumer is actually reacting to the rise in prices. For that reason, we have to pay attention to the April retail sales report on Thursday. That report offers a breakdown of buying trends for various sectors of the consumer economy. As of Friday, economists are expecting to see a 0.4% monthly increase, according to FactSet. The CEO of buy now, pay later company Affirm told Jim Cramer on Friday that consumers are still spending , so we'll see if that resilience shows up in the official government data. Outside of these three high-priority releases, we'll also get a closer look at the housing sector on Monday, with the release of the April existing home sales report, and at the manufacturing economy, when we get the April industrial production and capacity utilization report on Friday. The housing data is relevant for our position in Home Depot , and the manufacturing data matters at a very high level to our economically sensitive Club names Dover , DuPont and Linde . The more industrial activity, the better for them. Week ahead Monday, May 1 Existing Home Sales at 10 a.m. ET Before the bell: Circle Internet Group (CRCL), Constellation Energy Group (CEG), Barrick Mining (B), Carlyle Secured Lending (CGBD), monday.com (MNDY), Mosaic (MOS) After the bell: Hims & Hers Health (HIMS), AST SpaceMobile (ASTS), Plug Power (PLUG), Rigetti Computing (RGTI), Babcock & Wilcox Enterprises (BW), Marathon Digital Holdings (MARA) Tuesday, May 12 Consumer Price Index (CPI) at 8:30 a.m. ET Before the bell: Qnity Electronics (Q ),Â D-Wave Quantum (QBTS), First Majestic Silver (AG), Kopin (KOPN), Venture Global (VG), On Holding (ONON), Sea Limited (SE), Achieve Life Sciences (ACHV), BETA Technologies (BETA), JD.com (JD), Acurx Pharmaceuticals (ACXP), Amentum (AMTM), eToro Group (ETOR), Lithium Argentina (LAR), Legend Biotech (LEGN),Â Satellogic (SATL), Under Armour (UAA) After the bell: Karman Space & Defense (KRMN), Electromed (ELMD), AudioEye (AEYE), Franco-Nevada (FNV), Nextpower (NXT), Andersen Group (ANDG), Astronics (ATRO) Wednesday, May 13 Producer Price Index (PPI) at 8:30 a.m. ET Before the bell: Nebius Group (NBIS), Alibaba Group Holding (BABA), Dynatrace (DT), Eos Energy Enterprises (EOSE), Global-e Online (GLBE), ICL Group (ICL), Vishay Intertechnology (VSH), Wix.com (WIX) After the bell: Cisco Systems (CSCO), Enovix (ENVX), USA Rare Earth (USAR), Doximity (DOCS), GrabAGun Digital Holdings (PEW) Thursday, May 14 April Retail Sales Report at 8:30 a.m. ET Before the bell: Klarna (KLAR), Bullish (BLSH), Intuitive Machines (LUNR) After the bell: Figma (FIG), Nu Holdings (NU), Applied Materials (AMAT), Aquestive Therapeutics (AQST) Friday, May 15 Industrial Production and Capacity Utilization at 9:15 a.m. ET Before the bell: H World Group (HTHT), Alaska Air Group (ALK) (Jim Cramer's Charitable Trust is long *** FILL IN*** . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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Here are the 2 big things we're watching in the stock market in the week ahead

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