On Monday, stock futures traded down in anticipation of the release of additional retail earnings to kick off a shorter week due to the Thanksgiving holiday.
Futures contracts linked to the Dow Jones Industrial Average lost 25 points, which is equivalent to a loss of 0.06%. Futures contracts for the S&P 500 and the Nasdaq 100 both experienced losses of 0.50% and 0.35%, respectively.
The stock of Disney, on the other hand, defied the downward trend and increased by more than 8% after the media giant announced that Bob Iger will resume his role as CEO with immediate effect.
Investors have been mulling the efficacy of a recent bear market rally, which began earlier this month with the data on October’s consumer price index and picked up some momentum with the reading on wholesale prices last week. This rally was sparked by the readings on both of these indices.
Traders were hung up on the messaging from Federal Reserve officials during the previous week. These officials were less thrilled with the statistics and evaluated their confidence about the potential of inflation going down. Tuesday’s speeches by the President of the Federal Reserve Bank of Cleveland, Loretta Mester, and the President of the Federal Reserve Bank of St. Louis, James Bullard, will provide the market with additional Fedspeak to process.
Ed Yardeni of Yardeni Research stated that in his opinion, the low that occurred on October 12 was the bottom and that he believes the S&P 500 might rise to approximately 4,300 before the end of the year. He shared this information with CNBC on “Closing Bell: Overtime” on Friday night. At the moment, the benchmark index is found to be 3,965.34.
“The resiliency of the economy, which has been remarkable, is what’s making the significant difference in the market,” he said. “It’s been spectacular.” Everyone has been discussing whether we would have a soft landing or a harsh landing; in the meantime, there has been no touchdown at all. The consumer has not been informed of the economic downturn, and as a result, they continue spending.
However, on a corporate level, Target reported a slowing demand, and Amazon said that it will lay off 10,000 staff, despite the fact that Home Depot and Walmart have reported solid results. Retail sales climbed in October.
“Despite what holiday season spending may suggest, retail stocks tend to be in the top three for November, but in the bottom three for December, and somewhere in the middle of the pack in January,” Liz Young, SoFi’s chief investment strategist, said in a note this weekend.
“Seasonality is useful in market analysis, and it can be used to make some accurate forecasts. However, the strength of the economic cycle remains the same regardless of the season,” she went on to say. “Given the fact that the Federal Reserve has already raised interest rates by 375 basis points, that the yield curve has inverted, that there have been spikes in inflation, and that rising commodity prices are still a part of the narrative, we can almost certainly draw the conclusion that we are late in the economic cycle.”
An additional round of retail earnings will keep investors busy during this week, which is a short one because of the Thanksgiving break. Among the businesses that will be participating in this event are Best Buy, Nordstrom, Dick’s Sporting Goods, and Dollar Tree.
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