Markets This Week, 11/27-12/01, 2023: Focus on the Economy

Economy and Markets: Next week

With no market-moving earnings releases scheduled this week, investors will be zooming in on several key economic reports scheduled for release over the next few days. The main focus will be on the PCE data, which will help investors understand the ongoing impact of the central bank’s rate hikes.

All major U.S. indexes rose strongly last week, notching their fourth straight weekly gain, as markets shrugged off recent weakness in some economic data points as confirmation that the Fed’s hiking cycle has ended. Markets also expect the next move by policymakers to be a rate cut, which could happen in mid-2024. Last week’s biggest winner was the Dow Jones Industrial Average (DJIA) up 1.27%, while the S&P 500 (SPX1.13% up. Nasdaq Composite (AfterNasdaq-100 (NTX) increased by 1.07% and 1.06%.

The minutes of the Federal Reserve’s last meeting, released last week, were slightly less than investors had expected. While all FOMC participants agreed to „proceed cautiously,” many of them said risks to inflation remain to the upside. The minutes confirmed the Fed’s „higher for longer” message, but the latest batch of mostly soft economic data released after the latest Fed meeting adds some question marks about the length of the higher rate period. Investors now expect the Federal Reserve to maintain its more or less hawkish rhetoric. Many interpret that rhetoric as an attempt to dampen market sentiment to prevent further easing of financial conditions.

Although economic data has pointed to some weakness in recent months, consumers have so far held firm. Still, there are signs that U.S. consumers are beginning to feel the pinch of higher spending, with sales expected to show a weaker increase this holiday season than the average over the past decade. JP Morgan (JPM) has warned its clients that weakening consumer spending, along with lower inflation, will weigh on the earnings outlook through 2024. The bank’s strategists have advised reducing portfolio risk for the next year.

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In this uncertain environment, investors are strongly advised to follow economic reports closely and base their decisions on reliable data and analysis.

Upcoming Earnings and Dividend Announcements

Q3 2023 reporting is almost over, but there are still some important reports scheduled this week.

The most notable earnings events this week were reports from Dollar Tree (DLTR), Salesforce (CRM), Ulta Beauty (Ulta), Zscaler (ZS), CrowdStrike (CRUD), NetApp (NTAP), Splunk (SPLK), octa (OKTA), and Kroger (KR)

Companies’ reporting dates, consensus EPS forecasts, historical data, analyst estimates and price targets can be found on the TipRanks earnings calendar.

This week, Electronic Arts has ex-dividend dates coming up (EA), Home Depot (HD), Qualcomm (QCOM), Coca-Cola (There is), Bank of America (BAC), McDonald’s (MCD), General Motors (GM), eBay (Ebay), UnitedHealth (UNH), Nike (OF), and other dividend paying companies.

Companies’ ex-dividends and dividend payment dates, analyst ratings and price targets can be found on the TipRanks Dividend Calendar.

Upcoming economic calendar events

Several key announcements are scheduled over the next few days:

» Q3 2023 GDP Growth Annual (Second Estimate) – Wednesday, 11/29 – This report, released by the US Bureau of Economic Analysis, provides an update to the preliminary assessment of the health of the US economy in the previous quarter, incorporating new data received since the release of the first estimate. Economic growth in the third quarter is expected to come in at an even stronger pace than previously estimated, with analysts penciling in a 5% annual growth rate (the initial estimate was 4.9%).

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» Core PCE for October – Thursday, 11/30 – This report, released by the U.S. Bureau of Economic Analysis, reflects the average amount of money consumers spend each month, excluding seasonally volatile items such as food and energy. FOMC policymakers use the annual core PCE price index as the primary measure of inflation. Analysts expect Core PCE to reflect the inflation trend seen in the CPI report, which will decline further from September.

» October ISM Manufacturing PMI – Friday, 12/01 – Released by the Conference Board, this report shows business conditions in the US manufacturing sector. It is a significant indicator of overall economic conditions. PMIs are considered the most reliable leading indicators for assessing the state of the US economy, helping analysts and economists accurately predict changing economic trends. Unlike other sectors of the economy, manufacturing has been declining for 11 months; In October, it is expected to descend deeper into contraction territory.

Current and planned economic reports, central bank statements and other releases and the status of their impact on stock markets can be found on the TipRanks Economic Calendar.

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