What to know this week in markets

Minutes from the Federal Reserve’s policy meeting in November are expected to help shape the shorter holiday week ahead on Wall Street as markets look to rebound from a losing week.

US stock and bond markets will be closed on Thursday, November 24 for the Thanksgiving holiday. Trading will also end early on Black Friday, with markets closing at 1 pm ET

A reading of the discussion from the US central bank’s meeting earlier this month, set for release on Wednesday, will be the highlight of a lighter economic calendar in the coming days. The earnings calendar will be relatively sparse as the third quarter report heads into its final stretch.

Stocks posted a losing week last week despite modest gains on Friday after a hawkish Fedspeak chorus dampened optimism that surfaced lighter October inflation data.

The S&P 500 fell 0.7% last week while the Nasdaq Composite shed about 1.6% as central bank members declared in nearly a dozen speeches throughout the week that they intend to press on with aggressive policy tightening. The Dow Jones Industrial Average was roughly flat for the week.

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

Atlanta Federal Reserve Bank President Raphael Bostic was the latest Fed member to signal that possibility, saying in remarks Saturday in Florida that he was comfortable walking away from a 75-basis-point hike at the next meeting, but rates declared may reached 4.75%. -5% before the Fed ends its current tightening cycle.

“If the economy performs as I expect, I believe 75 to 100 basis points of additional tightening will be warranted,” Bostic said in remarks at 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 enough to control inflation over a reasonable time horizon.” Bostic is not currently a voting member of the FOMC.

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Atlanta Federal Reserve Bank President and CEO Raphael W. Bostic speaks at a European Financial Forum event in Dublin, Ireland, February 13, 2019. REUTERS/Clodagh Kilcoyne

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

Investors cheered the easing inflation report, but Bostic called the figures a “mixed bag.” The Consumer Price Index (CPI) rose at a 7.7% clip last month, down from 8.2% in September. While the number showed price increases cooled faster than expected in October, inflation remained more than three times the Federal Reserve’s price stability target of 2% — even as officials raised interest rates six times this year, which includes four straight 0.75% increases.

Fed Chairman Jerome Powell said at a press conference after this month’s meeting that he and his colleagues have “some way to go” on easing rate hikes, admitting the inflation picture has become more difficult.

“This means we have to have more restrictive policies, and that reduces the path to a soft landing,” he said.

Aggressive interest rate hikes risk tipping the US economy into recession, and Fed officials have recently come to acknowledge this risk more openly.

“Fed Chairman Powell recalibrated monetary policy at the November FOMC meeting when he adopted a new ‘speed vs destination’ paradigm – indicating an intention to reach a higher rate of terminal feeding funds while doing so at a slower pace, ” EY Parthenon Chief Economist Gregory Daco. said in a recent note. “The determination of central banks to tighten aggressive monetary policy together with the delayed effects of monetary policy on the economy increase the chances of a tightening.”

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

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

Goldman Sachs raised its projections for the Federal Reserve’s terminal rate to a range of 5% to 5.25%, targeting another 25-basis-point hike in May, noting the investment bank’s risk in its Fed forecast was tilted to the upside. there.

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“Inflation is likely to remain uncomfortably high for a while, and this may put pressure on the FOMC to deliver a longer series of small increases next year,” economists led by Jan Hatzius said.

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

Wall Street is winding down at the end of earnings season, but results from Dell Technologies (DELL), JM Smucker (SJM), Zoom Video (ZM), and Dollar Tree (DLTR) will be among some of the key corporate updates there. next week.

Fewer companies are citing concerns about a recession in the third quarter compared to the second quarter, according to data from FactSet Research.

Of 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, down from 242 in the last quarter’s earnings period.

Still, this quarter still marks the third-highest number of companies highlighting concerns about a potential economic downturn since at least 2010, according to FactSet data.

Economic calendar

Monday: There are no notable reports scheduled for release.

Tuesday: Chicago Fed National Activity IndexOctober (0.10 during previous month); Richmond Fed Index of Manufacturing ActivityNovember (-7 expected, -10 during previous month)

Wednesday: MBA mortgage applicationweek ended November 18 (2.7% over previous week); Order durable goodsPreliminary October (0.5% expected, 0.4% during previous month); Durable Excluding TransportPreliminary October (0.1% expected, 0.5% during previous month); First Unemployment Claimweek ended November 19 (225,000 expected, 222,000 during previous week); Continue the claimsweek ended November 12 (1.507 million during previous week); S&P Global US Manufacturing PMIPreliminary November (50.0 expected, 50.4 during previous month); S&P Global US Services PMIPreliminary November (48.0 expected, 47.8 during previous month); S&P Global US Composite PMIPreliminary November (48.2 during previous month); University of Michigan Consumer SentimentFinal November (55.5 expected, 54.7 previous); New Home SalesOctober (575,000 expected, 603,000 during previous month); New Home Salesmonth-on-month, October (-4.6% expected, -10.9% during previous month); Proceedings of the FOMC Meeting, November 1-2

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Thursday: Thanksgiving Day. There are no notable reports scheduled for release.

Friday: Black Friday. There are no notable reports scheduled for release.

Salary Calendar

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

Tuesday: Best Buy (BBY), HP (HPQ), Abercrombie & Fitch (ANF), American Eagle Outfitters (AEO), Analog Devices (ADI), Autodesk (ADSK), Baidu (BIDU), Burlington Storess (BURL), Canadian Solar ( CSIQ), Dick’s Sporting Goods (DKS), Dollar Tree (DLTR), Guess? (GES), Jack In The Box (JACK), Medtronic (MDT), Nordstrom (JWN), Vipshop (VIPS), VMware (VMW), Warner Music Group (WMG)

Wednesday: Deere (DE), SentinelOne (S)

Thursday: Thanksgiving Day. There are no notable reports scheduled for release.

Friday: Black Friday. There are no notable reports scheduled for release.

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

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