Stocks are entering one of the busiest weeks of the year, near record highs.
A late-week rally led by a rise in Tesla (TSLA) shares helped the Nasdaq Composite close the week up about 0.9%, just short of a new record high. Meanwhile, the S&P 500 (GSPC) fell more than 0.3% and the Dow Jones Industrial Average (DJI) fell more than 2.6%.
In the week ahead, an update on the Federal Reserve’s preferred inflation gauge, the October jobs report and results from big tech stalwarts Alphabet (GOOGL, GOOG), Apple (AAPL ), Amazon (AMZN), Microsoft (MSFT) and Meta. (META) will lead the markets for the November kickoff.
Updates on third-quarter economic growth, job openings, service and manufacturing sector activity and consumer confidence are also on the calendar.
A busy week in corporate earnings lies ahead, with 169 members of the S&P 500 expected to report quarterly results. Ford (FORD), AMD (AMD), McDonald’s (MCD), Eli Lilly (LLY) and Exxon (XOM) will be among the companies highlighting the calendar.
A host of economic data in the coming week will test investors’ bets. On Wednesday, the Bureau of Economic Analysis is expected to release the preliminary estimate of third-quarter gross domestic product (GDP). The US economy is expected to continue its momentum and post annualized growth of 3% during the quarter, in line with the growth seen in the second quarter.
Thursday will bring the final reading of the Fed’s preferred inflation gauge. Economists expect “core” annual PCE – which excludes the volatile food and energy categories – to come in at 2.6% in September, down from 2.7 % observed in August. Over the past month, economists forecast “core” PCE at 0.3%, up from 0.1% the month before.
On Friday, the Bureau of Labor Statistics will provide a new look at the national employment situation. The October jobs report is expected to show that 125,000 nonfarm payroll jobs were added to the U.S. economy, with unemployment steady at 4.1%, according to Bloomberg data. In September, the U.S. economy added 254,000 jobs, while the unemployment rate fell to 4.1%.
“After two hurricanes, a strike and continued furloughs, we expect a lot of noise in next Friday’s October jobs report,” Michael Reid of RBC Capital Markets wrote in a memo to his team on Thursday. customers.
Given the variety of factors that could weigh on job growth, Reid wrote that the unemployment rate “will provide the best read on the labor market this month.”
Heading into a busy week of economic data, markets are pricing in a 96% chance that the Federal Reserve will cut interest rates at its November meeting, according to the CME FedWatch tool.
While 37% of S&P 500 companies reported quarterly results, the index expects earnings growth of 3.7% year over year. According to FactSet, this would be the slowest annual growth rate since the second quarter of 2023.
Big Tech profits will test this narrative in the coming week. FactSet recently highlighted that the “Magnificent Seven” tech stocks are expected to grow year-over-year earnings by 18.1% this quarter, while the other 493 companies in the S&P 500 are only expected to see growth of 18.1%. 0.1%.
After a weekend tech rally brought several big tech names back near record highs, Apple, Alphabet, Amazon, Meta and Microsoft are all expected to report quarterly results in the coming week. The reports will once again put artificial intelligence at the center of attention. Investors will be watching for clues about how much these companies are spending on emerging technology and whether or not it’s turning a profit.
Given the recent rise in shares of big tech companies, Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, cautioned Yahoo Finance against possible muted reactions to the earnings release.
“There is a risk that you will see a name like Microsoft beat [estimates]which they historically do about 76% of the time on earnings, and you risk getting nothing out of the stock price,” Tengler said.
Economic data surprised Wall Street higher over the past month. The Citi Economic Surprise Index, which measures whether economic data is better or worse than expected, rose to its highest level since April.
This coincided with a rise in the 10-year Treasury yield (^TNX), which has added about 50 basis points over the past month to hover around 4.2%. In some cases, rising yields can be a headwind for stocks. But as Callie Cox, chief market strategist at Ritholtz Wealth Management, pointed out on welcome sign for stocks.
“A gradual upward movement [in yields] …for the right reasons, with the expectation of higher growth, that has always tended to be good for growing earnings,” Gargi Chaudhuri, chief investment and portfolio strategist, told Yahoo Finance of BlackRock Americas. your wallet remains really important.
Weekly calendar
Monday
Economic data: Dallas Fed manufacturing activity, October (-9 expected, -9 previously)
Winnings: Ford (F), Philips (PHG), Waste Management (WM)
Tuesday
Economic data: S&P CoreLogic NSA on 20 cities YoY, August (previously 5.92%); Conference Board Consumer Confidence, October (99.0 expected, 98.7) JOLTS Job Openings, September (7.9 million expected, 8.04 million); Dallas Fed services activity, October (-2.6 previously)
Winnings: Alphabet (GOOGL, GOOG), AMD (AMD), BP Oil (BP), Chipotle (CMG), Crocs (CROX), McDonald’s (MCD), JetBlue (JBLU), Paypal (PYPL), Pfizer (PFE), Reddit ( RDDT), Royal Caribbean Group (RCL), Snap (SNAP), Sofi (SOFI), Visa (V)
Wednesday
Economic data: MBA mortgage applications, week ended October 25 (-6.7% previously); ADP private payroll, October (+100,000 expected, +143,000 previously); Quarter-over-quarter annualized GDP, third quarter advance estimate (3% expected, 3% previously); Core PCE price index quarter over quarter, third quarter increase (+2.8% previously); Pending month-over-month home sales, September (0.6% from)
Winnings: ADP (ADP), Caterpillar (CAT), Carvana (CVNA), Coinbase (COIN), Etsy (ETSY), Eli Lilly (LLY), Microsoft (MSFT), Meta (META), Roku (ROKU), Robinhood (HOOD) , Starbucks (SBUX)
THURSDAY
Economic data: Core PCE index month-on-month, September (+0.2% expected, +0.1% previously); Core PCE index over one year, September (+2.6% expected, 2.7% previously); Initial unemployment claims, week ending October 26 (previously 227,000); Continuing claims, week ending October 19 (previously 1.897 million); Employment cost index, third quarter (0.9% expected, 0.9% previously); Job cuts at Challenger, year-over-year, October (+52.4% previously); Personal income, September (+0.4% expected, +0.2% previously); Personal spending, September (+0.4% expected, +0.2% previously); MNI Chicago PMI, October (previously 46.6)
Winnings: Apple (AAPL), Amazon (AMZN), Conoco Phillips (COP), Estée Lauder (EL), Kellanova (K), Intel (INTC), Mastercard (MA), Norwegian Cruise Lines (NCL), Peloton (PTON), Merck (MRK), SiriusXM (SIRI)
Friday
Economic calendar: Non-agricultural jobs, October (+125,000 expected, +254,000 previously); Unemployment rate, October (4.1% expected, 4.1% previously); Average hourly wage, month over month, October (+0.3% expected, +0.4% previously); Average hourly wage, over one year, October (+4% expected, +4% previously); Average weekly hours worked, October (34.2 expected, 34.2 previously); Labor force participation rate (previously 62.7%); US S&P Global Manufacturing PMI, October Final (previously 47.8); ISM manufacturing, October (47.6 expected, 47.2 previously); ISM prices paid, October (previously 48.3)
Winnings: Charter Communications (CHTR), Dominion Energy (D), fuboTV (FUBO), Chevron (CVX), Exxon Mobil (XOM), Wayfair (W)
Josh Schafer is a reporter for Yahoo Finance. Follow him on @_joshschafer.
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