Economic Insights: A Packed Week Ahead
As the Thanksgiving holiday approaches, the economic calendar is bustling with activity. This week, investors will be treated to a fresh inflation report and minutes from the Federal Reserve’s latest meeting.
Market Performance: A Strong Showing
Last week, the Dow Jones Industrial Average surged 2%, while the S&P 500 and Nasdaq both climbed 1.7%. Year-to-date, the Dow has gained 17%, the S&P 500 has risen 25%, and the Nasdaq has soared 27%.
Earnings Season Winds Down
While earnings season is largely behind us, a few notable companies will still report this week. On Monday, Agilent Technologies, Zoom Video, and Bath & Body Works take center stage, followed by Dell, Analog Devices, and CrowdStrike on Tuesday. So far, 475 S&P 500 companies have reported, with earnings up 9% compared to the same quarter last year. The Communication Services and Technology sectors are leading the charge, while Energy lags behind.
Fed Minutes and Economic Data
On Tuesday, the minutes from the Federal Reserve’s November meeting will be released, providing insight into the central bank’s thinking on interest rates and inflation. Additionally, New Home Sales, Consumer Confidence, and the Case-Shiller Home Price Index will be announced. Wednesday brings inflation data in the form of the PCE report, as well as updates on GDP, Personal Income, Personal Spending, and Durable Goods.
A Positive Note on Inflation
Argus Chief Economist Chris Graja, CFA, highlights a promising development on the inflation front. Walmart’s recent earnings report revealed almost no like-for-like inflation in the U.S. this quarter, with general merchandise sales growing in the low single digits despite prices deflating by over 4%. This suggests that some consumers are experiencing sufficient income growth to purchase more than just essentials. Moreover, Walmart is offering a traditional Thanksgiving meal at a lower price point than last year, a welcome development ahead of the busy holiday shopping season.
Mortgage Rates on the Rise
Mortgage rates are creeping back up towards the 7% mark, with the average 30-year fixed-rate mortgage hovering near this level. As the economic landscape continues to evolve, investors will be closely watching these developments for signs of what’s to come.
Leave a Reply