This week we saw a bit of red in the markets, with the four major indices down between 1%-3% on the week. This was mainly driven by some hotter-than-expected PPI data. Unfortunately, it looks like we’re in for another week of volatility, as we approach the looming CPI data release and Fed rate hike.
Although there weren’t many economic data releases of note this week, November’s PPI numbers came in a bit hotter than expected. Analysts were predicting a 0.2% increase when in reality, producers experienced a 0.3% increase. This is one of the Fed’s favorite measures of inflation, so this release led markets to sell off on Friday.
With so much economic data being released this week, there are bound to be some large swings in the market. Tuesday kicks the week off with CPI data, which everyone is hoping will come in at or below expectations.
On Wednesday, we’ll hear from Jerome Powell and the Fed with regard to the next interest rate hike. At this time, the market is pricing in a 50 bps hike, however, key metrics the Fed uses have not been trending in the right direction. Lastly, we’ll get some retail sales data on Thursday, which is always important, as the consumer drives the economy.
Earnings releases are really beginning to slow down as we enter the holiday season. However, there are still a few companies of note reporting their earnings this week:
12/14 – Lennar Corporation (LEN/LEN.B), Trip.com (TCOM)
12/15 – Adobe (ADBE)
12/16 – Darden Restaurants (DRI)
Although there are only a few companies reporting earnings this week, there are some very interesting ones, like ADBE. Analysts will be eager to hear how their core lines of business are performing despite economic headwinds, in addition to any updates regarding the Figma acquisition.
It’ll also be interesting to hear what LEN has to say regarding backlogs, inventory, and cancellations. The housing market is in a very precarious position right now, so listening to homebuilder conference calls is key!
Monitoring the market conditions this week.
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