What you need to know about the markets this week

Minutes from the Federal Reserve’s November policy-setting meeting are expected to help shape the upcoming holiday-shortened week on Wall Street as markets rebound from a lost 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 p.m. ET

A reading of the discussions from the US central bank’s meeting earlier this month, to be released on Wednesday, will be a highlight of the lighter economic calendar in the coming days. The earnings calendar will also be relatively sparse as third quarter reporting enters its final cycle.

Stocks posted a losing week last week, despite modest gains on Friday following a Fedspeak chorus of weaker October inflation data that dampened optimism.

The S&P 500 lost 0.7% last week and the Nasdaq Composite lost about 1.6% as members of the central bank said they intend to continue with aggressive policy tightening for the week. The Dow Jones Industrial Average was roughly flat for the week.

Minutes from the FOMC’s last meeting will show that the Federal Reserve Committee, which votes on monetary policy, is planning a half-point rate hike for officials at its December meeting.

Atlanta Federal Reserve Bank President Raphael Bostic was the latest Fed member to hint at the possibility, saying he was comfortable walking away from a 75-basis-point hike at the next meeting, but that rates could reach 4.75%, in comments on Saturday in Florida. -5% before the Fed is done with the current tightening cycle.

“If the economy continues as I expect, I believe 75 to 100 basis points of additional tightening will be warranted,” Bostic said in a statement to the Southern Economic Association in Fort Lauderdale. “Clearly more is needed, and I believe this level of the policy rate will be sufficient to contain inflation over a reasonable time horizon.” Bostic is not currently a voting member of the FOMC.

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

Investors welcomed the easing of inflation reports, but Bostic called the numbers a “mixed bag.” The Consumer Price Index (CPI) increased by 7.7% last month and decreased by 8.2% in September. While the number showed price increases cooled faster than expected in October, inflation remains more than three times the Federal Reserve’s price stability target of 2% — even as officials have raised interest rates six times this year, including four straight 0.75% hikes.

At a news conference after a meeting this month, Fed Chairman Jerome Powell acknowledged that he and his colleagues have “some way to go” to moderate rising prices, and that the inflation picture has become more difficult.

“It means we have to have a more restrictive policy and that narrows the way for a soft landing,” he said.

Aggressive interest rate hikes risk tipping the U.S. economy into recession, a risk Fed officials have recently come to acknowledge more openly.

“Fed Chair Powell recalibrated monetary policy at the November FOMC meeting by adopting a new paradigm of ‘destination vs. speed’ – signaling an intention to reach a higher terminal feeding funds rate, but doing so at a slower pace,” said Gregory Dako, Chief Economist at EY Parthenon. . said in a recent note. “Central banks’ determination to aggressively tighten monetary policy increases the likelihood that the lagged effects of monetary policy on the economy will be excessive tightening.”

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after the closed two-day 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 news conference in Washington, U.S., November 2, 2022. REUTERS/Elizabeth Frantz

Goldman Sachs raised its forecast for the Federal Reserve’s key rate to 5.25% from 5%, making another 25 basis point hike in May, noting that the investment bank’s risks to the Fed outlook have tilted to the upside.

“Inflation is likely to remain uncomfortably high for some time, which could put pressure on the FOMC to deliver a longer series of small hikes next year,” said economists led by Jan Hatzius.

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

Wall Street is winding down toward 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 companies’ key corporate updates. next week.

Fewer companies reported recession concerns in the third quarter than in the second quarter, according to data from FactSet Research.

Among S&P 500 companies making earnings calls between Sept. 15 and Nov. 16, 26% fewer companies mentioned the term “recession” — 179 mentioned the word, down from 242 during last quarter’s earnings period.

However, this quarter was still the third-highest number of companies citing 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 Performance IndexOctober (0.10 in the previous month); Richmond Fed Manufacturing Activity IndexNovember (-7 is expected, -10 in the previous month)

Wednesday: MBA Mortgage ProgramsWeek ending November 18 (up 2.7% over previous week); Durable Goods OrdersOctober primary (0.5% expected, 0.4% in previous month); Non-Transportable Durable GoodsOctober primary (0.1% expected, 0.5% in the previous month); Initial Unemployment ClaimsWeek ending Nov. 19 (225,000 expected, 222,000 last week); Continuing ClaimsWeek ending November 12 (1.507 million during previous week); S&P Global US Manufacturing PMINovember preliminary (50.0 expected, 50.4 in the previous month); S&P Global US Services PMINovember preliminary (48.0 expected, 47.8 in the previous month); S&P Global US Composite PMINovember preliminary (48.2 in the previous month); University of Michigan Consumer SentimentsNovember final (55.5 expected, 54.7 ago); New Home SalesOctober (575,000 expected, 603,000 in previous month); New Home Salesmonth-on-month, October (expected -4.6%, -10.9% in the previous month); FOMC meeting minutes, November 1-2

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

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

Earnings 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. There are no notable reports scheduled for release.

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

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

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