What to know this week in markets

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

U.S. stock and bond markets will be closed on Thursday, Nov. 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 meeting earlier this month, set for release on Wednesday, will be highlighted by the light economic calendar in the coming days. The earnings calendar will also be relatively sparse as third-quarter reporting heads into its final stretch.

Stocks registered a losing week last week despite modest gains on Friday after a chorus of hawkish Fedspeak dampened optimism sparked by soft October inflation data.

The S&P 500 fell 0.7% last week while the Nasdaq Composite fell about 1.6% as central bank members emphasized in about a dozen speeches throughout the week that they wanted to press aggressive policy harder. The Dow Jones industrial average was nearly flat for the week.

Minutes from the latest meeting of the FOMC, the Federal Reserve committee that votes on monetary policy, showed officials are likely to show plans for a half-point rate hike at their December meeting.

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

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

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

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

Investors cheered easing inflation reports, but Bostick called the figures a “mixed bag.” The consumer price index (CPI) rose at a 7.7% clip last month, down from 8.2% in September. While numbers showed price growth cooled faster than expected in October, inflation remained more than three times the Federal Reserve’s price stability target of 2% — even though officials have raised interest rates six times this year, including four straight 0.75% hikes.

Fed Chairman Jerome Powell said at a post-meeting press conference this month that he and his colleagues have “some way to go” to reduce rising rates, acknowledging that the inflation picture remains more challenging.

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

Fed officials have recently come to more openly acknowledge the risk that aggressive interest rate hikes will tip the U.S. economy into recession.

“Fed Chair Powell recalibrated monetary policy at the November FOMC meeting by adopting a new ‘pace vs. destination’ paradigm — signaling an intention to reach a higher terminal Fed funds rate while slowing it,” EY Parthenon Chief Economist Gregory Ducko said. said in a recent note. “The slow impact of monetary policy on the economy, coupled with the determination of central banks to aggressively tighten monetary policy, increases the likelihood of overtightening.”

Federal Reserve Board Chairman Jerome Powell speaks at a news conference following the closing 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., Nov. 2, 2022. REUTERS/Elizabeth Frantz

Goldman Sachs raised its forecast for the Federal Reserve’s terminal rate to a range of 5% to 5.25%, tacking on another 25-basis-point hike in May, tilting the investment bank’s risks to the upside in its Fed forecast.

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

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

Wall Street is barreling 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 the few major corporate updates. coming week.

Fewer companies are worried about a recession in the third quarter than in the second quarter, according to data from FactSet Research.

Among S&P 500 companies that conducted earnings calls from Sept. 15 to Nov. 16, 26% fewer companies cited the word “recession” — 179 mentioned the word, down from 242 in the previous quarterly earnings period.

Still, this quarter still marks the third-highest number of companies citing concerns about a possible economic slowdown since at least 2010, according to data from FactSet.

Financial calendar

Monday: There are no notable reports scheduled for release.

Tuesday: Chicago Fed National Activity IndexOctober (0.10 in previous month); Richmond Fed Manufacturing Activity IndexNovember (-7 expected, -10 in previous month)

Wednesday: MBA mortgage applicationweek ended November 18 (2.7% on previous week); Durable goods ordersOctober early (0.5% expected, 0.4% in previous month); Durable goods excluding shippingOctober early (0.1% expected, 0.5% in previous month); Initial unemployment claimsweek ended Nov. 19 (225,000 expected, 222,000 in previous week); Continuous claimsweek ended Nov. 12 (1.507 million in previous week); S&P Global US Manufacturing PMINovember early (50.0 expected, 50.4 in previous month); S&P Global US Services PMINovember early (48.0 expected, 47.8 in previous month); S&P Global US Composite PMIearly November (48.2 in previous month); University of Michigan Consumer SentimentNovember Finals (55.5 expected, 54.7 before); New home saleOctober (575,000 expected, 603,000 in previous month); New home saleMonth-on-month, October (-4.6% expected, -10.9% in the previous month); FOMC meeting minutes, November 1-2

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Thursday: A day of 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 Stores ( BURL ), Canadian Solar ( BURL) CSIQ), Dick’s Sporting Goods (DKS), Dollar Tree (DLTR), guess what? (GES), Jack in the Box (JACK), Medtronic (MDT), Nordstrom (JWN), Vipshop (VIPS), VMware (VMW), Warner Music Group (WMG)

Wednesday: Deere (DE), SentinelOne (S)

Thursday: A day of thanksgiving. There are no notable reports scheduled for release.

Friday: black friday There are no notable reports scheduled for release.

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

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