What to know this week in markets

Minutes from the Federal Reserve’s November policy meeting are expected to help shape Wall Street’s short weekend as markets look to recover from a week of losses.

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

A reading of the discussions from the US central bank’s meeting earlier this month, which will be released 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 head into their final phase.

Stocks posted a losing week last week despite modest gains on Friday after a chorus of Fedspeak dampened optimism on the back of softer October inflation data.

Last week, the S&P 500 fell 0.7%, while the Nasdaq Composite fell about 1.6%, as members of the central bank indicated in about a dozen speeches during the week that they intended to continue with aggressive policy tightening. The Dow Jones Industrial Average was roughly flat for the week.

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

Atlanta Federal Reserve Bank President Raphael Bostic was the latest member of the Fed to signal that possibility, saying in a statement on Saturday in Florida that he would hold off on a 75-basis-point hike at the next meeting, but hinted that rates could rise to 4, reach 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 is warranted,” Bostic said in remarks to the Southern Economic Association in Fort Lauderdale. “Clearly more is needed, and I believe that this level of policy rate will be sufficient to contain inflation over a reasonable time horizon.” Bostic is not currently a voting member of the FOMC.

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President and CEO of the Federal Reserve Bank of Atlanta, Raphael W.  Bostic attends a European Financial Forum event in Dublin, Ireland February 13, 2019. REUTERS/Clodagh Kilcoyne

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

Investors were cheered by the cut in inflation reports, but Bostic called the numbers a “mixed bag.” The Consumer Price Index (CPI) rose 7.7% last month, compared to 8.2% in September. While the figures showed that price growth cooled more quickly than expected in October, inflation remained more than three times below the Federal Reserve’s price stability target of 2% – even though officials have raised interest rates six times this year, from including a four-fold increase of 0.75%.

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

“This means we have to have restrictive policies, and that narrows the way to a soft landing,” he said.

Aggressive interest rate hikes threaten to trigger a US recession, as Fed officials have recently been openly admitting.

“Fed Chairman Powell recalibrated monetary policy at the November FOMC meeting by adopting a new paradigm of ‘velocity to destination’ – indicating an intention to reach higher levels of terminal liquidity while doing so at a slower pace.” ” said EY Parthenon Chief Accountant Gregory Dako. it is said in a recent note. “The decision by central banks to tighten monetary policy sharply, along with the delayed impact of monetary policy on the economy, increases the likelihood of further tightening.”

Federal Reserve Chairman Jerome Powell speaks at a news conference after the two-day closed-door meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., November 2, 2022. REUTERS/Elizabeth Franz

Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, U.S., November 2, 2022. REUTERS/Elizabeth Franz

Goldman Sachs raised its forecast for the Federal Reserve’s terminal rate to 5.25% from 5%, marking another 25-basis point hike in May, noting that the investment bank’s risks to the Fed’s forecast have risen.

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

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 manufacturing activity. Measures of new home sales and consumer sentiment by a closely watched University of Michigan survey are also used.

Wall Street is facing the end of earnings season, but results from Dell Technologies ( DELL ), JM Smucker ( SJM ), Zoom Video ( ZM ) and Dollar Tree ( DLTR ) will be among some of the major corporate updates. next week.

According to FactSet Research, fewer companies are worried about a recession in the third quarter than in the second quarter.

Of the S&P 500 companies that made earnings calls between Sept. 15 and Nov. 16, 26% fewer companies mentioned the term “recession” — 179 mentioned the word, down from 242 during the previous quarter’s earnings period.

However, this quarter is still the third-highest number of companies citing concerns about a possible economic downturn since at least 2010, according to FactSet data.

Economic calendar

Dushanbe: No significant reports are scheduled for publication.

Tuesday: Chicago Fed National Performance IndexOctober (0.10 during the previous month); Index of manufacturing activity Richmond FRNovember (-7 expected, -10 for last month)

Wednesday: MBA mortgage programsweek ended November 18 (2.7% over the previous week); Orders for durable goodsPreliminary October (0.5% expected, 0.4% during the previous month); Durable goods except transportationPreliminary October (0.1% expected, 0.5% during the previous month); Initial unemployment claimsweek ended Nov. 19 (225,000 expected, 222,000 during previous week); Ongoing Claimsweek ended November 12 (1.507 million during the previous week); S&P Global PMI on US ManufacturingNovember forecast (50.0 expected, 50.4 during the previous month); S&P Global US Services PMINovember forecast (48.0 expected, 47.8 during the previous month); S&P Global US Composite PMINovember advance (48.2 during the previous month); University of Michigan Consumer SentimentEnd of November (55.5 expected, 54.7 earlier); Sale of new housesOctober (575,000 expected, 603,000 during the previous month); Sale of new housescompared to October (-4.6% expected, -10.9% during the previous month); Minutes of the FOMC meeting, November 1-2

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Thursday: Thanksgiving day. No significant reports are scheduled for publication.

Friday: Black Friday. No significant reports are scheduled for publication.

Income calendar

Dushanbe: 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 Storess (BURL), Canadian Solar ( 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: Thanksgiving day. No significant reports are scheduled for publication.

Friday: Black Friday. No significant reports are scheduled for publication.

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

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