The S&P 500 ($SPX) (SPY) had a good week last week and finished up over 2%. Part of the rally was bolstered by some better-than-expected inflation news in the middle of the week. Some of the earnings stocks we discussed last week did not fare as well, however. Walmart (WMT) had a nice surprise on the actual earnings numbers last week, but cautious guidance caused the stock to trade lower the following session and the rest of the week. It closed down over 6% on the week. It has been a theme in many of this year's earnings reports that the actual top and bottom line numbers are a beat or at expectations, but concerns over the economic conditions have weighed on the price after the call.
This week could be an odd week for trading and the markets, there are some potentially important news releases due out, but sandwiched in the middle is the US Thanksgiving Holiday. Here are 5 things to watch in the market this week.
Earnings
Some additional high-impact earnings are out this week. First up on Tuesday Nvidia (NVDA) reports after the market closes. Last quarter's blowout report was marred by some potential controversy about one of the customers they sold chips to, but the stock still is trading close to the $500 mark. Given how heavily tech is weighted in some of the indexes, any weakness after earnings could spread into the general markets. Also out Tuesday is Lowes (LOW), and similar to Home Depot, the real gold on this earnings report could be the guidance. Lowes, while not as popular with contractors, is extremely popular with the weekend warrior home improvement people. Their guidance could give a lot of insight into housing and home improvement work in the coming quarters.
Thanksgiving
The Thanksgiving Holiday is celebrated on Thursday in the US, and this means that the markets will be closed. In addition to missing a day of trading in the markets, it could throw volume off from Wednesday through Friday as many large firms stop early Wednesday and give the Friday after Thanksgiving off (Black Friday) for shopping.
Fed Meeting Minutes
Due Tuesday at 2 p.m. Eastern is the FOMC Meeting minutes from the previous FOMC Meeting. While there will not be any new rate releases, it is a more detailed look into the Fed’s decision to hold rates and what they are seeing that is influencing their decision. This release often produces some short-term volatility around the release.
Existing Home Sales
Also out on Tuesday are the existing home sales at 10 am Eastern. These have slowly been declining over the past several months showing either a reluctance to sell as prices are starting to come down or just a shrinkage of the available housing supply. Either way, if we continue to see this number fall, the markets could view it as housing continuing to lock up and start to sell off on the expectation that rates will have to start to rise again. Alternatively, if the recent trend in home sales starts to reverse and we come out with a beat the markets could rally on the appearance of returning to a form of normal in the housing market.
Flash PMIs
Both Manufacturing and Services PMI are due Friday at 9:45 Eastern. These reports have the potential to really move the markets this week as Friday could be a lower-volume trading day due to Thanksgiving the day before. Over the past several months they have both hovered around the 50 level showing neither any expansion nor contraction. If we get a surprise print over 50, especially by a significant margin, then the markets could rally. The opposite is also true, if we miss by a large margin then we could see a sell-off after the report.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
