What to know this week in markets

Minutes from the Federal Reserve November Policy Development Meeting should help shape the shortened holiday week on Wall Street as markets look to rebound from a losing week.

US stock and bond markets will be closed on Thursday 24 Nov., on the occasion of Thanksgiving. Trading will also end early on Black Friday, with markets closing at 1 p.m. ET

A reading of US central bank meeting discussions earlier this month, due for release on Wednesday, will be the culmination of a lighter economic calendar in the days ahead. The timing of earnings will also be relatively clear as third quarter reports enter their home stretch.

Inventories recorded a losing week last week despite modest gains on Friday after a fedspeak falcon chorus amortized optimism resurfaces by softer inflation data in October.

The S&P 500 fell 0.7% last week while the Nasdaq Composite lost about 1.6% as members of the central bank said in nearly a dozen speeches throughout the week, they intend to follow up with an aggressive policy crunch. The Dow Jones Industrial Average was roughly flat for the week.

Minutes from the latest meeting of the FOMC, the Federal Reserve’s committee that votes on monetary policy, are expected to show officials expect a half-point rate hike at their December meeting.

Atlanta Federal Reserve Chairman Raphael Bostic was the latest Fed member to flag the likelihood, saying in remarks Saturday in Florida that he was comfortable to walk away from increases of 75 basis points at the next meeting, but the announced rates could reach 4.75% to 5% before the Fed is finished with its current tightening cycle.

“If the economy performs as I expect, I think further tightening of 75 to 100 basis points will be warranted,” Bostic said during an address to the Southern Economic Association in Fort Lauderdale. “It is clear that more is needed, and I believe that this level of the policy rate will be sufficient to contain inflation over a reasonable time horizon.” Bostic is not currently a voting member of the FOMC.

Federal Reserve Bank of Atlanta Chairman Raphael W. Bostic. REUTERS/Clodagh Kilcoyne

Investors cheered the easing in inflation reports, but Bostic called the numbers a “mixed bag.” The consumer price index (CPI) increased by 7.7% last month, compared to 8.2% in September. While the number showed price increases cooled faster than expected in October, inflation remains more than three times the Federal Reserve’s 2% price stability target – even as authorities raised interest rates six times this year, including four consecutive increases of 0.75%.

Fed Chairman Jerome Powell said in a press conference after the meeting this month that he and his colleagues had “Some Ways to Go” on easing soaring prices, admitting that the inflation picture has become more difficult.

“That means we have to have a more restrictive policy, and that narrows the path to a soft landing,” he said.

Aggressive interest rate hikes could tip the US economy in recession, with Fed officials recently more openly acknowledging this risk.

“Fed Chair Powell recalibrated monetary policy at the November FOMC meeting by adopting a new ‘speed versus destination’ paradigm – indicating an intention to achieve a higher terminal federal funds rate while doing so at a slower pace,” Gregory Daco, chief economist at EY Parthenon said in a recent note. “The determination of central banks to aggressively tighten monetary policy as well as the lagged effects of monetary policy on the economy increase the chances of excessive tightening.”

Federal Reserve Board Chairman Jerome Powell speaks at a news conference following a two-day closed Federal Open Market Committee meeting on interest rate policy in Washington , United States, November 2, 2022. REUTERS/Elizabeth Frantz

Federal Reserve Board Chairman Jerome Powell speaks during a news conference in Washington, U.S., November 2, 2022. REUTERS/Elizabeth Frantz

Goldman Sachs has raised its projection of the Federal Reserve’s terminal rate in a range of 5% to 5.25%, continuing another 25 basis point rise in May, noting that the investment bank’s risks to its Fed forecast have tipped to the upside.

“Inflation is expected to remain uncomfortably high for some time, and this could put pressure on the FOMC to make a longer series of small hikes next year,” the economists led by Jan Hatzius said.

Elsewhere on the economic calendar this week, readings on durable goods orders and global PMI data will provide investors with the latest snapshots of industrial and manufacturing activity. Measures of new home sales and consumer sentiment through the closely watched University of Michigan survey are also available.

Wall Street is heading towards the end of the earnings season, but the results of Dell Technologies (Dell), JM Smucker (SJM), Video zoom (ZM) and the dollar tree (LTRD) will be among the major company updates over the coming week.

According data from FactSet Research.

Among S&P 500 companies that made earnings calls from Sept. 15 to Nov. 16, 26% fewer companies cited the term “recession” — 179 mentioned the word, compared to 242 during the downturn period. last quarter results.

Yet this quarter still marks the third highest number of companies emphasizing concerns about a potential economic slowdown since at least 2010, according to FactSet data.

Economic calendar

Monday: No notable reports scheduled for publication.

Tuesday: Chicago Fed National Activity IndexOctober (0.10 in the previous month); Richmond Fed Manufacturing Activity IndexNovember (-7 expected, -10 in previous month)

Wednesday: MBA Mortgage Applicationsweek ended November 18 (2.7% over the previous week); Durable Goods OrdersOctober preliminary (0.5% expected, 0.4% in previous month); Durable goods excluding transportOctober preliminary (0.1% expected, 0.5% in previous month); Initial jobless claimsweek ended November 19 (225,000 expected, 222,000 the previous week); Continuing claimsweek ended November 12 (1.507 million in the previous week); US S&P Global Manufacturing PMINovember preliminary (50.0 expected, 50.4 in previous month); S&P Global US Services PMINovember preliminary (48.0 expected, 47.8 in previous month); S&P Global US Composite PMIpreliminary November (48.2 in the previous month); University of Michigan Consumer SentimentNovember final (55.5 expected, 54.7 before); Sales of new homesOctober (575,000 expected, 603,000 in previous month); Sales of new homesmonth-over-month, October (-4.6% expected, -10.9% in prior month); FOMC Meeting Minutes, November 1-2

Thursday: Thanksgiving Day. No notable reports scheduled for publication.

Friday: Black Friday. No notable reports scheduled for publication.

Earnings Calendar

Monday: Agile (A), Dell Technologies (Dell), JM Smucker (SJM), Jacobs Engineering (J), Li Auto (LI), Urban Outfitters (URBN), Weber (WEBR), Video zoom (ZM)

Tuesday: Best Buy (BBY), HP (HPQ), Abercrombie & Fitch (ANF), American Eagle Outfitters (AEO), Analog Devices (ADI), Autodesk (ADSK), Baidu (BIDU), Burlington stores (BURL), Canadian Solar (CSIQ), Dick’s Sporting Goods (SDKs), Dollar tree (LTRD), To guess? (EMS), Jack In The Box (JACK), Medtronic (MTD), Nordstrom (JWN), Vipshop (VIP), VMware (vmw), Warner Music Group (WMG)

Wednesday: Dere (OF), Sentinel One (S)

Thursday: Thanksgiving Day. No notable reports scheduled for publication.

Friday: Black Friday. No notable reports scheduled for publication.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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