Fed minutes, consumer sentiment, Thanksgiving: What to know this week in markets

Federal Reserve Minutes Policy meeting in November are expected to help shape Wall Street’s upcoming holiday-shortened week as markets look to rebound from a losing week.

US stock and bond markets will be closed Thursday, November 24, on the occasion of the Thanksgiving holiday. Trading will also end early on Black Friday, with markets closing at 1:00 PM ET

Reading of discussions from the US central bank meeting earlier this month, scheduled for release on Wednesday, will be the highlight of the lighter economic calendar in the coming days. The earnings calendar will also be relatively sparse as third quarter reports enter their final stages.

Registered shares a losing week last week despite modest gains on Friday after a chorus of hawkish Fedspeak moistened optimism emerges from weaker inflation data in October.

The S&P 500 fell 0.7% last week, while the Nasdaq Composite lost about 1.6% as members of the central bank said in nearly a dozen speeches this week, they intend to press ahead 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 that officials plan to raise interest rates by half a point at their December meeting.

Atlanta Federal Reserve Bank President Raphael Bostick was the latest Fed member to signal that possibility, saying on Saturday in Florida that he comfortable to walk away from increases of 75 basis points at the next meeting, but stated rates could reach 4.75%-5% before the Fed ends its current tightening cycle.

“If the economy develops as I expect, I believe 75 to 100 basis points of additional tightening will be warranted,” Bostick said in remarks to the Southern Economic Association in Fort Lauderdale. “Clearly, more is needed, and I believe this rate level will be sufficient to contain inflation over a reasonable time horizon.” Bostic is currently a non-voting member of the FOMC.

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

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

Investors welcomed the easing of the inflation reports, but Bostic called the numbers “mixed.” Consumer Price Index (CPI) rose at a 7.7% clip last month, down from 8.2% in September. Although the number showed that price increases cooled faster than expected in October, inflation remained more than three times above the Federal Reserve’s price stability target of 2 percent — even after officials raised interest rates six times this year , including four consecutive increases of 0.75%..

Fed Chairman Jerome Powell said at a news conference after a meeting this month that he and his colleagues had “a few ways to go” to ease rising prices, acknowledging that the inflation picture has become more challenging.

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

Aggressive interest rate hikes risk tip the US economy into recession, with Fed officials recently beginning to acknowledge that risk more openly.

“Federal Reserve Chairman Powell realigned monetary policy at the November FOMC meeting, adopting a new ‘velocity to destination’ paradigm — indicating an intent to reach a higher final funds rate while doing so at a slower pace EY Parthenon Chief Economist Gregory Dako said in a recent note. “The determination of central banks to tighten monetary policy aggressively, together with the lagged effects of monetary policy on the economy, increases the chances of excessive tightening.”

Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a closed-door 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 Franz

Goldman Sachs has raised its forecast for the Federal Reserve’s final interest rate to a range of 5% to 5.25%, edging toward another 25-basis-point hike in May, noting the investment bank’s risks to its Fed forecast have tilted upward.

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

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

Wall Street eases toward the end of earnings season, but results from Dell Technologies (DELL), JM Smucker (SJM), video scaling (ZM) and Dollar Tree (DLTR) will be among some of the key enterprise updates in the coming week.

Fewer companies cited recession fears in the third quarter compared to the second quarter, according to data from FactSet Research.

Of the S&P 500 companies that held earnings calls from Sept. 15 to Nov. 16, 26 percent fewer companies cited the term “recession” — 179 mentioned the word, down from 242 during last quarter’s earnings period.

Still, this quarter still marked 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 publication.

Tuesday: Chicago Federal Reserve National Index of ActivityOctober (0.10 in the previous month); Richmond Federal Reserve Index of Manufacturing ActivityNovember (-7 expected, -10 in the previous month)

Wednesday: MBA mortgage applicationsweek ended November 18 (2.7% in previous week); Orders of durable goodsOctober preliminary (0.5% expected, 0.4% in the previous month); Durable goods, excluding transportOctober preliminary (0.1% expected, 0.5% in the previous month); Initial unemployment claimsweek ended Nov. 19 (225,000 expected, 222,000 in previous week); Continuing Claimsweek ended Nov. 12 (1.507 million in previous week); S&P Global US Manufacturing PMINovember preliminary (50.0 expected, 50.4 in previous month); S&P Global US Services PMIpreliminary data for November (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 SentimentNovember final (55.5 expected, 54.7 before); Sales of new homesOctober (575,000 expected, 603,000 in previous month); Sales of new homesmonth over the previous month, October (-4.6% expected, -10.9% in the previous month); Minutes of the FOMC meeting, November 1-2

Thursday: Thanksgiving day. There are no notable reports scheduled for publication.

friday: Black Friday. There are no notable reports scheduled for publication.

Income calendar

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

Tuesday: Best Buy (BBY), HP (HPQ), Abercrombie & Fitch (ANF), American Eagle Outfitters (LLC), analog devices (ADI), Autodesk (ADSK), Baidu (WILL BE), 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 publication.

friday: Black Friday. There are no notable reports scheduled for publication.

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

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