CPI, Earnings and Other Can't Miss Items This Week

With the US election concluded, the market shot up into the weekend with the S&P 500 ($SPX) (SPY) closing the week up almost 5%. In addition, some of the big names like Tesla (TSLA) also finished the week very strong closing the week up a whopping 29%.

Powell also came through with another rate cut bringing the Fed Funds rate down another 25 basis points, whether this will start to spark inflation back up remains to be seen, but the market clearly loves it.

This week there is a Bank holiday on Monday, several news announcements throughout the week, and Powell speaking again at a conference on Thursday.

Here are 5 things to watch this week in the Market.

Bank Holiday

On Monday the US celebrates Veterans Day, which is a bank holiday where banks and the Bond markets are closed. Futures and the Stock market will remain open, but odds favor lower volume as trade desks are closed. This could create an environment for extra volatility. 

Earnings

Earnings have really died out in recent weeks, and as we said last week Nvidia is the next really large release and that is out in a few weeks. 

 

There are still a few releases to watch though, first up is Home Depot (HD) on Tuesday. This is important to watch for a few reasons, first is how the stock actually reacts to the earnings and guidance. Second is how they see the coming quarters in terms of profitability and store traffic. Any appreciable decrease expected here could be seen as them prepping for an economic downturn. Disney (DIS), and Alibaba (BABA) are also expected to report this week and both have heavy ties to the consumer so any miss here could show the consumer is tightening their purse strings on discretionary spending.

CPI

Wednesday is the first real news release of the week with CPI coming out before the market opens. These are core measures of inflation in the prices paid by consumers, and as this is the first release since the Fed started easing it could produce some volatility. 

If prices immediately edge back up it could show that inflation has not been beaten and the Fed started this too early. This could be seen as a negative in the market and could spark some selling. If they come in at or below expectations it could help to continue the rally from this week.

PPI

PPI is out on Thursday and this is the change in prices for finished goods sold by producers to either the end-user or an intermediary. Similar to CPI, any unexpected increases could cause some worry to enter the market the inflation is back or heating back up. If it's at or below expectation then the market could see this as a positive. The next impact of this could also depend on how CPI comes out the day before.

Retail Sales

To close the week out on the news front, Retail Sales are due out Friday morning. These reports are heavily influenced by CPI and PPI as they are the total value of goods and services sold. One thing to watch here is and divergence between the regular and Core releases as the only difference is the inclusion of Auto sales. If there is a large gap between them, it could be inferred that rates are still having a negative impact on the auto market.

Best of luck this week and don’t forget to check out my daily options article.

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On the date of publication, Gavin McMaster had a position in: BABA. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.