S&P 500 futures edged ahead of higher retail earnings before the Thanksgiving holiday

Traders on the floor of the NYSE, October 21, 2022.

Source: NYSE

S&P 500 futures fell slightly ahead of retail earnings Sunday evening.

Futures tied to the broader market index were 0.1% lower. Dow Jones industrial average futures were down 38 points, or 0.1%. Nasdaq 100 futures traded flat.

Each of the major averages posted a one-day gain in the previous trading session but a week’s decline. The Dow rose nearly 200 points, or 0.6%. The S&P rose 0.5% and the Nasdaq Composite ended just 0.01% above the flat line.

Investors are reflecting on the strength of the recent bear market rally, which started at the beginning of the month with the October consumer price index reading and gained some steam with last week’s reading in wholesale prices. Traders were left hanging on messaging from Federal Reserve officials last week, who were less impressed with the data and reassessed their confidence about the prospect of slowing inflation.

Yardeni Research’s Ed Yardeni said in his view, the Oct. 12 lows and the S&P 500 could climb closer to 4,300 by the end of the year, he told CNBC’s “Closing Bell: Overtime” Friday night. The key index is currently at 3,965.34.

“The biggest difference in the market is the resilience of the economy, which is spectacular,” he said. “Everybody’s debating whether we’re in for a soft landing or a hard landing — meanwhile, there’s been no landing. Consumers haven’t gotten the recession memo, they’re spending.”

Retail sales rose in October, but at the corporate level Target reported lower 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 will be in the top third in November, but in the bottom third in December, and somewhere in the middle in January,” Liz Young, chief investment strategist at SoFi, said in a note this weekend.

“Seasonality has a place in market analysis and has some predictive power. But the power of the economic cycle is strong, no matter the time of year,” he added. “With the Fed’s 375 basis point hike so far, an inverted yield curve, an increase in inflation and commodity prices still part of the story, we can all conclude that we are late in the economic cycle.”

This week, ahead of Thanksgiving, a historically quiet one, investors will be busy with another batch of retail earnings before the start of the post-holiday shopping season. Companies on deck include Best Buy, Nordstrom, Dick’s Sporting Goods and Dollar Tree.

Investors will receive a flurry of economic reports, including durable goods, new home sales, jobless claims and consumer sentiment, as well as minutes from the last Federal Reserve meeting.

Next week Short one. The market is closed on Thursday for Thanksgiving. On Friday, the stock market closes at 1 PM ET and the bond market closes at 2 PM ET.

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