Here are the 2 big things we’re watching in the stock market in this week
The stock market is heading into the holiday-shortened week, fueled by data releases delayed by the government shutdown, as well as latent concerns about AI stock valuations and massive data center spending. Investors will be trying to determine what this all means for the Federal Reserve’s next interest rate move. Reminder: The stock market is closed on Thursday for Thanksgiving. Trading will continue 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 reopening and federal agencies getting services back up and running, Wall Street is finally starting to get economic reports again from the Labor and Commerce departments. The programs are still outdated, and much of the data is already stale, especially since we hear from nearly all of our portfolio companies’ management teams during earnings season. This week, the Department of Commerce Census Bureau will release its September retail sales report at 8:30 a.m. ET on Tuesday. At the same time, the BLS will also release the producer price index for September. While both retail sales and PPI are generally significant, heavily tracked items that will provide additional insight into consumer spending and how tariffs affect corporate profit margins, these figures will be around two months old. September marks the end of the third quarter in government data, and we’d be better off giving more weight to the latest quarterly results and forward guidance we’ve received from Club retail giants Amazon, TJX Companies, Walmart, Target and others. The message from retail earnings was that consumers remain concerned about the economy and inflation and are shopping at lower prices to get the best value. That’s why low-price retailer TJX, which owns the TJ Maxx, Marshalls and HomeGoods chains, closed its shares at a record high of $151 and change on Friday. TJX is well positioned heading into the holiday shopping season. 2. Interest rate expectations: The lack of government economic data has made the job of U.S. central bankers much more difficult. How should Federal Reserve policymakers consider both sides of their dual mandate of maximizing employment and promoting stable prices with their eyes closed? While private surveys and what companies say 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 a press conference after the October meeting that a December interest rate cut was not a lock because the government shutdown muddied the waters; The market initially thought otherwise and was still betting on an outage next month. This probability later decreased considerably, with the CME FedWatch tool pegging the chance of a disruption at 40%. New York Fed President John Williams flipped the script on Friday. Speaking ahead of a speech in Santiago, Chile, he said he saw room for “further adjustments” to rates. This signaled that the interest rate cut, which would be the third this year, could happen in December. Following Williams’ comments, the market rose and concerns about AI stock valuations took a backseat. FedWatch’s final odds for a December rate cut are now 70%. The Fed’s last scheduled meeting of the year will be held on December 9-10. With the cancellation of the postponed October consumer price index and the joint release of October and November employment figures on December 16, the Fed will still continue to play with one hand tied behind its back. Next week Monday, November 24, 10:30 a.m. ET: Dallas Fed index (November) After bell earnings: Zoom (ZM) Tuesday, November 25 Before bell: Best Buy (BBY), Burlington Stores (BURL), Dick’s Sporting Goods (DKS), Kohl’s (KSS), Abercrombie & Fitch (ANF), Alibaba (BABA) After bell: Workday (WDAY), Dell (Dell), HP (HPQ); Zscaler (ZS), Urban Outfitters (URBN) 8:30 AM ET: Retail sales (September) 8:30 AM ET: Producer price index (September) 10:00 AM ET: National Association of Realtors pending home sales (October) 10:00 AM ET: S&P/Case-Shiller home prices (September) 10:00 AM ET: Conference Board consumer confidence (November) Wednesday, November 10. 26 Before the bell: Deere (DE) 9:45 a.m. ET: Chicago PMI survey (November) 2 p.m. ET: Fed Beige Book of Economic Conditions Thursday, Nov. 27 U.S. financial markets are closed for Thanksgiving Friday, Nov. 28 Black Friday (the 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 stocks in Jim Cramer’s Charitable Trust.) 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