Here are the 2 big things we’re watching in the stock market in this week
The stock market heads into the holiday-shortened week anticipating the release of data delayed by the government shutdown, along with a lingering undercurrent of worry about AI stock valuations and massive data center spending. Investors will look to determine what it all means for the Federal Reserve’s next interest rate move. Reminder: The stock market is closed on Thursday for Thanksgiving. Trading will resume on Black Friday, the unofficial start of the holiday shopping season, but with an early close at 1 p.m. ET. 1. Data dump: With the government reopened and federal agencies getting services back up and running, Wall Street is finally starting to get economic reports from the Labor and Commerce departments again. The schedules are still out of whack, and much of the data is already stale, especially since we just heard from almost all of our portfolio companies’ management teams during earnings season. This week, the Census Bureau at the Commerce Department will issue its September retail sales report at 8:30 a.m. ET on Tuesday. At the same time, the BLS will deliver the September producer price index. While both retail sales and the PPI are generally important, heavily watched items that will provide some additional insight into consumer spending and how tariffs are impacting corporate profit margins, these numbers will be about two months old. The month of September in government data marks the end of the third quarter, and we’re better off putting more weight behind the latest quarterly results and forward guidance we just got from Club retail giants Amazon, TJX Companies , Walmart , Target , and many others. The message from retail earnings was that consumers remain concerned about the economy and inflation, and are shopping for low prices to get the best value. That’s why off-price retailer TJX, owner of the T.J. Maxx, Marshalls, and HomeGoods chains, saw its stock close on Friday at a record high $151 and change. TJX is well-positioned heading into the holiday shopping season. 2. Rate expectations: The dearth of government economic data has made the jobs of U.S. central bankers that much more difficult. How are Federal Reserve policymakers supposed to weigh both sides of their dual mandate of maximizing employment and fostering steady prices with blindfolds on? While private surveys and what companies are actually saying about their businesses during earnings season can help, the independent Fed also relies on data from federal government agencies. Fed Chairman Jerome Powell said at his post-October meeting press conference that a December interest rate cut was not a lock, as the government shutdown muddied the waters; the market initially thought otherwise and was still betting on a cut next month. That probability then went way down, with the CME FedWatch tool putting the odds of a cut at 40%. New York Fed President John Williams flipped the script on Friday. In remarks ahead of a speech in Santiago, Chile, he said he sees room for a “further adjustment” in rates. That signalled maybe a December rate cut, which would be the third this year, would happen after all. The market zoomed higher after Williams’ comments, putting concerns about AI stock valuations on the back burner. The latest FedWatch probabilities for a December cut are now 70%. The Fed’s final scheduled meeting of the year will be held Dec. 9-10. With the delayed October consumer price index canceled and the October and November employment numbers set for release together on Dec. 16, the Fed will still be playing with one hand tied behind its back. Week ahead Monday, Nov. 24 10:30 a.m. ET: Dallas Fed index (Nov.) After the bell earnings : Zoom (ZM) Tuesday, Nov. 25 Before the bell : Best Buy (BBY), Burlington Stores (BURL), Dick’s Sporting Goods (DKS), Kohl’s (KSS), Abercrombie & Fitch (ANF), Alibaba (BABA) After the bell : Workday (WDAY), Dell (Dell), HP (HPQ); Zscaler (ZS), Urban Outfitters (URBN) 8:30 a.m. ET: Retail sales (Sept.) 8:30 a.m. ET: Producer price index (Sept.) 10 a.m. ET: National Association of Realtors pending home sales (Oct.) 10 a.m. ET: S & P/Case-Shiller home prices (Sept.) 10 a.m. ET: Conference Board consumer confidence (Nov.) Wednesday, Nov. 26 Before the bell : Deere (DE) 9:45 a.m. ET: Chicago PMI survey (Nov.) 2 p.m. ET: Fed Beige Book of economic conditions Thursday, Nov. 27 U.S. financial markets closed for Thanksgiving Friday, Nov. 28 Black Friday (unofficial start of the holiday shopping season) U.S. stock market closes early at 1 p.m. ET (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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