What to know this week in markets

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

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

A readout of discussions from the US central bank’s meeting earlier this month, to be released on Wednesday, will be the highlight of a lighter economic calendar in days ahead. The earnings calendar will also be relatively sparse as third quarter reporting is in its final stretch.

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

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

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

Atlanta Federal Reserve Bank President Raphael Bostic was the latest Fed member to indicate this likelihood, saying in remarks in Florida on Saturday that he was comfortable moving away from 75 basis point hikes at the next meeting, but claimed rates can reach 4.75%. -5% before the Fed finishes its current tightening cycle.

“If the economy continues as I expect, I believe 75 to 100 basis points of additional tightening will be warranted,” Bostic said in remarks to the Southern Economic Association in Fort Lauderdale. “It is clear that more is needed, and I believe this level of the 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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Federal Reserve Bank of Atlanta President and Chief Executive Officer Raphael W. Bostic speaks at a European Financial Forum event in Dublin, Ireland, February 13, 2019. REUTERS/Clodagh Kilcoyne

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

Investors cheered the easing of inflation reports, but Bostic called numbers a “mixed bag.” The Consumer Price Index (CPI) rose by a 7.7% mark last month, down from 8.2% in September. While the number showed that price increases cooled faster than expected in October, inflation remains more than three times the Federal Reserve’s price stability target of 2% — even as officials have raised interest rates six times this year, including four straight 0.75%- increases.

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

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

Aggressive interest rate hikes could send the US economy into recession, with Fed officials recently acknowledging this risk more openly.

“Fed Chairman Powell recalibrated monetary policy at the November FOMC meeting by adopting a new ‘speed vs. destination’ paradigm – indicating an intention to reach a higher terminal fed funds rate while at a slower pace,” Gregory Daco, chief economist of EY Parthenon. said in a recent note. “Central banks’ determination to tighten monetary policy aggressively, together with the delayed effect of monetary policy on the economy, increases the chance of an over-tightening.”

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

Goldman Sachs lifted its projection for the Federal Reserve’s terminal rate to a range of 5% to 5.25%, with a further increase of 25 basis points in May, noting that the investment bank’s risks to its Fed forecast tilted upwards.

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“Inflation is likely to remain uncomfortably high for a while, and that could put pressure on the FOMC to deliver a longer series of small increases 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 the University of Michigan’s closely watched survey are also on tap.

Wall Street is reeling from the end of earnings season, but results from Dell Technologies ( DELL ), JM Smucker ( SJM ), Zoom Video ( ZM ) and Dollar Tree ( DLTR ) will be some of the most important corporate updates in the upcoming week.

Fewer companies cited worries about a recession in the third quarter compared to the second quarter, according to data from FactSet Research.

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

Still, this quarter is still the third-highest number of companies expressing concern about a potential economic downturn since at least 2010, according to FactSet data.

Economic Calendar

Monday: No notable reports scheduled for release.

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

Wednesday: MBA Mortgage Applicationsweek ended November 18 (2.7% during previous week); Durable Goods OrdersOctober provisional (0.5% expected, 0.4% during previous month); Durable goods transport excludedpreliminary October (0.1% expected, 0.5% during previous month); Initial Jobless Claimsweek ended November 19 (225,000 expected, 222,000 during previous week); Continuing claimsweek ended November 12 (1.507 million during previous week); S&P Global US Manufacturing PMIPreliminary November (50.0 expected, 50.4 during previous month); S&P Global US Services PMIPreliminary November (48.0 expected, 47.8 during previous month); S&P Global US Composite PMIprovisional November (48.2 during previous month); University of Michigan Consumer SentimentNovember final (55.5 expected, 54.7 ahead); New home salesOctober (575,000 expected, 603,000 during previous month); New home salesmonth-on-month, October (-4.6% expected, -10.9% during previous month); FOMC Meeting Minutes, November 1-2

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Thursday: thanksgiving day No notable reports scheduled for release.

Friday: black friday 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 Storess (BURL), Canadian Solar ( CSIQ), Dick’s Sporting Goods (DKS), Dollar Tree (DLTR), Guess? (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 notable reports scheduled for release.

Friday: black friday No notable reports scheduled for release.

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

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