A relatively quiet Thanksgiving week is expected due to economic data including initial jobless claims, durable goods data and new home sales for October.
Here are the key events that happen on Monday it may affect trading.
PROFIT STATEMENTS CONTINUED: Retailers will be in the spotlight for the second week in a row, with many specialty and non-essential companies reporting quarterly results.
Starting Monday, Urban Outfitters will be among the companies delivering third-quarter earnings.
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Also on Monday, look out for Dell Technologies, Jacobs Solutions, jellies maker JM Smucker Co., Agilent Technologies and Zoom Video Communications.
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|DELL||DELL TECHNOLOGIES INC.||41.43||-0.61||-1.45%|
|J||JACOBS ENGINEERING GROUP INC.||126.04||+1.78||+1.43%|
|SZHM||JM SMUCKER CO.||146.14||+1.60||+1.11%|
|BUT||AGILENT TECHNOLOGIES INC.||146.19||+1.75||+1.21%|
|ZM||ZOOM VIDEO COMMUNICATIONS INC.||80.94||-0.69||-0.85%|
On Tuesday, look for PC and printer maker HP Inc., device maker Medtronic PLC, cloud computing company VMware Inc., soup giant Campbell Soup Co., Warner Music Group Corp., Baidu, Autodesk, and Analog Devices Inc.
|FROM||DIRE & CO.||414.26||+1.27||+0.31%|
|CPB||CAMPBELL SOUP CO.||51.56||+1.07||+2.12%|
|WMG||WARNER MUSIC GROUP CORP.||27.13||-0.09||-0.33%|
Finally, on Wednesday, farm equipment maker Deere & Co. will report third quarter earnings.
ECONOMIC REPORTS: This will be a relatively quiet week for economic data due to the shortened working week due to the Thanksgiving holiday.
All reports will be published on Wednesday.
Look for initial jobless claims, durable goods data and new home sales for October.
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In addition, the final University of Michigan Consumer Sentiment Index for November will be released on Wednesday.
It is also planned to publish the minutes of the Fed’s policy meeting on November 1-2.
MARKET REVIEW: Shares rose on Friday, ending a turbulent week as investors weighed in on interest rate prospects.
The S&P 500 added 18.78 points, or 0.5%, to 3965.34 points, while the Nasdaq Composite added 1.10 points, or less than 0.1%, or 11146.06 points. The Dow Jones Industrial Average rose 199.37 points, or 0.6%, to 33,745.69.
All three indexes are down two of the last three weeks. Of the 11 sectors of the S&P 500, nine rose on Friday. The only underperformers were energy and communications services stocks.
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The slowdown in inflation caused stocks to rise last week, while dollar and bond yields declined. The S&P posted its best performance since the summer last week.
But in recent days, hopes that the Federal Reserve will reverse its campaign of aggressive interest rate hikes have faded somewhat.
“We had a 6 percent rally in the S&P 500 last week. We don’t think the Fed wants to see a return of buoyancy,” said Derek Amay, co-chief investment officer at StrategicPoint Investment Advisors in Rhode Island.
Amey said he hides from volatility by holding shares in industrial and medical companies along with bonds.
Central bank officials, including St. Louis Fed President James Bullard, issued a call this week to keep raising rates to curb decades of high inflation.
Bullard said on Thursday that the Fed’s discount rate could rise higher than interest rate futures traders expect. At the same time, strong data in the labor market and retail sales suggest that the economy still has a long way to go before higher borrowing costs trigger a downturn that could prompt the Fed to change course.
All this has caused anxiety in the stock market, although the S&P 500 is still about 11% above its recent low on October 12th.
HOME SALE: On the economic front, US existing home sales fell for the ninth month in a row in October as high mortgage rates forced home buyers out of the market.
“Nothing guarantees that inflation is behind us,” said Peter Boukvar, chief investment officer at Bleakley Financial Group. “Where it settles is really the most important thing here. Will we return to its pre-Covid trend of 1 to 2%, or limit ourselves to 3 to 4%?”
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Bukvar said he is betting that inflation will be between 3% and 4% in 2023.
He plans to continue holding inflation-protected securities and treasury stocks in the precious metals and energy sectors, which tend to do better during periods of inflation.
TREASURE UPDATES: Treasury yields are reversed, with short-term US government borrowing costs higher than long-term yields.
Such dynamics have often predicted a recession in the past.
The 10-year Treasury yield rose to 3.817% from 3.774% on Thursday.
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Many investors expect the Fed to stop raising rates early next year but keep them on hold for some time. This can still be a challenge for stocks, especially those with high valuations.
“Once the Fed starts noticing cracks in the employment and inflation data, we will have a pause in January and February,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
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Cardillo said he expects the S&P 500 to rise to 4,150 by the end of this year, citing historical data that stocks tend to do better during the Christmas holidays. This will be 4.5% above the current level.
Credit: www.foxbusiness.com /