The Week Ahead
May 18, 2026
Economic news
Initial Jobless Claims
Initial unemployment claims have been trending down over the last twelve months, with recent claims tying for the lowest amount since 19691. Last week totaled 200,000, still quite low compared to most of the last twelve months. Given job cut announcements from several companies such as Meta and Microsoft2, it will be curious to see if jobless claims stay at these lower levels throughout the year, or if claims pick up as the layoffs take effect.
Housing
Housing starts were up in March to the highest levels since last July; rising 10.8% month over month. Coming in at 1.502 million, the housing market is in a tough spot. It seems that consumers are still willing to pay for these higher prices, as we haven’t seen a huge cutback in homebuyers3.
Earnings Related Market Movers
Home Depot (HD)
At first glance, Home Depot’s most recent earnings for the fourth fiscal quarter of 2025 may seem significantly worse than 2024. Earnings came in at $2.58 per diluted share in 2025 vs. $3.02 in 20244. However, it is important to remember that there was a 14th week in 2024, which added $0.30 per diluted share from which 2025 did not benefit. Still, earnings were in decline through the end of the year.
Looking ahead, Home Depot has something to prove. Guidance for fiscal 2026 included expectations for sales to increase between 2.5% to 4.5%, while earnings per diluted share are anticipated to be flat or up 4% year over year. If the company manages to hit the high end of that guidance, it would mark an improvement in earnings growth compared to the last few years.
Home repairs are unavoidable regardless of the state of the market, but it will be interesting to see if management has any commentary on the housing market during their earnings call.
Cava (CAVA)
The Mediterranean restaurant chain has seen shares climb 56.22% over the last six months but it has been very volatile, dropping 10% in the last month. The reason for all the volatility is likely the stock’s high valuation – Cava trades at nearly 140 times trailing earnings. Carrying a market capitalization of nearly $9 billion, there is a disconnect between the actual tangible assets of the business, and the price at which the stock is trading.
Cava has returned a 94.5% gain over the last five years, but it needs to prove that the growth story is still intact in its next earnings release. Revenue grew 22.5% in 2025, with a same restaurant sales increase of 4%. While revenue continued to grow in the fiscal fourth quarter, same restaurant sales only grew by 0.5%5. This is an area of concern for the business. Cava is young, and continues to expand by opening new restaurants, but it also needs to prove that it can expand sales at its existing locations.
Cisco (CSCO)
The retail giant has seen shares gain 17.4% year to date and has given investors returns of 184% over the last five years (compared to the S&P’s 79%). Walmart appears to be staying steady, despite the higher cost of groceries facing consumers.
Walmart is coming off of a fairly standard quarter for the company, with a fourth quarter increase of 5.6% in revenue to $190.7 billion year over year. Across the board things looked good globally: eCommerce sales increased 24%, the advertising business was up 37%, and membership fee revenue increased 15.1%6. However, Walmart was in the news recently for announcing layoffs/relocations of roughly 1,000 corporate employees7.
Looking to the announcement of Walmart’s first quarter results, investors will likely be looking for stability, and a continuation of the themes already being displayed. The headache for the stock was a fourth quarter that included an 18.5% decline in net income per diluted share to $0.53 per share. Investors will undoubtedly be looking for slightly better results on the earnings front.
1 https://tradingeconomics.com/united-states/jobless-claims
2 https://www.cnbc.com/2026/04/24/20k-job-cuts-at-meta-microsoft-raise-concern-of-ai-labor-crisis-.html
3 https://www.cnbc.com/2026/05/13/mortgage-rates-move-to-highest-level-in-5-weeks.html
4 https://ir.homedepot.com/news-releases/2026/02-24-2026-110040985
5 https://investor.cava.com/news/news-details/2026/CAVA-Group-Reports-Fourth-Quarter-and-Full-Year-Fiscal-2025-Results/default.aspx
6 https://www.wsj.com/business/retail/walmart-layoffs-relocates-technology-jobs-23bbf322
7 https://stock.walmart.com/_assets/_8c08db5ff83d674770025fb0a4846a19/walmart/db/938/9972/earnings_release/Earnings+Release+%28FY26+Q4%29.pdf
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