S&P 500 futures fall slightly ahead of retail earnings ahead of Thanksgiving holiday

Traders on the floor of the NYSE, October 21, 2022.

Source: NYSE

S&P 500 futures fell slightly on Sunday night ahead of another batch of retail earnings to kick off a shortened week for the Thanksgiving holiday.

Broad stock index futures were down 0.1%. Dow Jones Industrial Average futures were 38 points lower, or 0.1%. Nasdaq 100 futures hovered on the flatline.

The major averages each posted a day up but a week down in the previous trading session. The Dow gained nearly 200 points, or 0.6%. The S&P climbed 0.5% and the Nasdaq Composite ended just 0.01% above the flatline.

Investors have been reflecting on the strength of the recent bear market rally, which began earlier in the month with October’s Consumer Price Index reading and gained momentum with the week’s reading. last on wholesale prices. Last week, traders were stymied by messages from Federal Reserve officials, who were less impressed with the numbers and reassessed their optimism about the possibility of slowing inflation.

Ed Yardeni of Yardeni Research said he believed the Oct. 12 low was the lowest and that the S&P 500 could hit near 4,300 by the end of the year, he said. to CNBC on “Closing Bell: Overtime” Friday night. The benchmark currently sits at 3,965.34.

“What makes the big difference in the market is the resilience of the economy, it’s been spectacular,” he said. “Everyone is wondering if we’re going to have a soft landing or a hard landing – until then, there’s no landing. The consumer hasn’t gotten the recession memo and they’re still spending.”

Retail sales rose in October, but at the corporate level, Target reported slowing demand and Amazon said it would lay off 10,000 employees – although Home Depot and Walmart reported strong results.

“Despite what holiday season spending may suggest, retail stocks tend to be in the top three for November, but bottom three for December, and somewhere in the middle of the pack in January,” Liz Young , SoFi’s chief investment strategist, said in a note this weekend.

“Seasonality has its place in market analysis and has some predictive power. But the power of the business cycle is stronger, regardless of the time of year,” she added. “With 375 basis points of Fed rate hikes so far, an inverted yield curve, inflation spikes and commodity prices still part of the story, we can almost conclude that we are behind. in the economic cycle.

This week, a historically quiet pre-Thanksgiving week, investors will be busy with another bunch of retail earnings to digest before the start of the post-holiday shopping season. Best Buy, Nordstrom, Dick’s Sporting Goods and Dollar Tree are among the businesses on deck.

Investors will also receive a slew of economic reports, including durable goods, new home sales, jobless claims and consumer sentiment, as well as the release of minutes from the last Federal Reserve meeting.

The week ahead is short. The market will be closed Thursday for Thanksgiving. On Friday, the exchanges will close at 1 p.m. ET and the bond market will close at 2 p.m. ET.

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