Traders on the NYSE floor, Oct. 21, 2022.
S&P 500 futures fell slightly on Sunday night ahead of another set of retail earnings to start a shortened week for the Thanksgiving holiday.
Futures tied to the broad market index were down 0.1%. Dow Jones Industrial Average futures were down 38 points, or 0.1%. Nasdaq 100 futures are hovering in the flat line.
The major averages each posted a day but a down week in the previous trading session. The Dow rose nearly 200 points, or 0.6%. The S&P rose 0.5% and the Nasdaq Composite finished just 0.01% above the flat line.
Investors are reflecting on the strength of the recent bear market rally, which began earlier in the month with the October consumer price index reading and picked up some steam with last week’s reading of the wholesale price. Traders last week were hung up on messaging from Federal Reserve officials, who were less than impressed with the numbers and reassessed their optimism around the possibility of slowing inflation.
Ed Yardeni of Yardeni Research said that in his view, the October 12 low is the low and the S&P 500 could rise to near 4,300 by the end of the year, he told CNBC on “Closing Bell: Overtime” Friday night . The benchmark index currently sits at 3,965.34.
“What makes a big difference in the market is the strength of the economy, it’s amazing,” he said. “Everybody’s debating whether we’re going to have a soft landing or a hard landing — at the moment, there isn’t any landing. The consumer didn’t get the recession memo and they’re continuing to spend.”
Retail sales rose in October, but at the corporate level Target reported a slowdown in demand and Amazon announced it would lay off 10,000 employees – although Home Depot and Walmart reported strong results.
“Regardless of what holiday spending suggests, retail stocks are likely to be in the top three for November, but in the bottom three for December, and somewhere in the middle of January, ” Liz Young, SoFi’s chief investment strategist, said in a note this week.
“Seasonality has a place in market analysis and has some predictive power. But the power of the economic cycle is stronger, regardless of the time of year,” he added. “With 375 basis points of Fed rate hikes to date, an inverted yield curve, rising inflation, and commodity prices still part of the narrative, we can all but conclude that we are late in the economic cycle.”
This week, a historically quiet one before Thanksgiving, investors will be busy with another batch of retail earnings to digest before the post-holiday shopping season begins. Best Buy, Nordstrom, Dick’s Sporting Goods and Dollar Tree are among the companies on deck.
Investors will also get more economic reports, including durable goods, new home sales, jobless claims, and consumer sentiment, as well as the release of minutes from the last meeting. of the Federal Reserve.
The coming week is short. The market is closed on Thursday for Thanksgiving. On Friday, stock exchanges close at 1 pm ET and the bond market closes at 2 pm ET.