The stock market rally continues this morning, with the Dow up another +380 points at this hour. The S&P 500 is +40 and the Nasdaq +160 points, following a strong up-week which concluded with an energetic Friday session. Market participants look to be picking up where they left off last week.
Considering we have a truncated trading week with the observance of Thanksgiving on Thursday and a half-day of trading on “Black Friday,” there are quite a few data reports expected this week. None today, though — we’re starting at a slower pace.
Economic Reports Expected This Week: PCE, Home Sales and More
Tuesday morning brings us a new Case-Shiller home price index for September and Consumer Confidence numbers for November. In between, New Home Sales for October will also come out.
Wednesday brings us many reports that would normally come out later in a normal week, pulled forward so everyone can enjoy the holiday weekend. Weekly Jobless Claims will join Durable Goods Orders, Retail/Wholesale Inventories, a first revision of Q3 GDP and the big Personal Consumption Expenditures (PCE) report for October.
Of these, the PCE figures are the most meaningful, as they are the preferred measure of inflation for the Fed, which meets again mid-next month to decide on monetary policy — particularly, whether to lower interest rates another quarter-point or leave them where they are. Currently, both PCE year over year on headline and on core (subtracting volatile food and energy expenditures) are expected to tick up — 20 basis points (bps) to +2.3% on headline, 10 bps to +2.8% on core — so this would be a good way to forecast the next Fed move on interest rates.
The other this the Fed will pay close attention to ahead of the next meeting is employment. Longer-term jobless claims rose above 1.9 million for the first time in three years last week; next week we’ll get the big non-farm payrolls report for this month.
Q3 Earnings Roundup: Bath & Body Works and More
Bath & Body Works (BBWI) shares are up +20% following the specialty retailer’s Q3 earnings report out ahead of the opening bell today. The company beat estimates on both top and bottom lines — earnings of 48 cents per share outpaced the Zacks consensus by 2 cents, while revenues of $1.61 billion surpassed the $1.58 billion expected — while also raising full-year EPS (which remains in line with our previous forecasts). Revenues are expected to continue to decline overall, however; the big jump today is making up for some of the -30% selloff year to date.
After today’s close, electronics equipment maker Agilent (A) and communications platform Zoom Video (ZM) are scheduled to report earnings. Both are expecting slight gains year over year on their bottom lines, with modestly lower revenues from the year-ago quarter. Neither has missed on earnings in five years; in Zoom’s case, it has never missed since its 2019 IPO.
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