WASHINGTON (AP) — With Thanksgiving and the formal launch of the holiday shopping season this week, Americans will again gather for Turkey Day meals before knocking off items on their Christmas gift lists.
Most big U.S. retailers are closed on Thanksgiving Day. However, many will open early the following day, Black Friday, the unofficial start of the holiday gift-buying season and the biggest shopping day of the year.
Here’s what is open and closed this Thanksgiving, along with a travel forecast from the experts at AAA auto club.
Government Buildings
Government offices, post offices, courts and schools are closed.
Banks and the stock market
U.S. stock markets and banks are closed Thursday; however, markets reopen on Friday for a shortened trading day, wrapping up at 1 p.m. Eastern.
Package Delivery
Standard FedEx and UPS pickup and delivery services will not be available on Thanksgiving, although some critical services will be offered at certain locations.
Retailers
Walmart will be closed on Thanksgiving but most stores will open at 6 a.m. local time on Black Friday.
Target will be closed on Thanksgiving, but most stores will open at 6 a.m. local time on Black Friday.
Macy’s will be closed on Thanksgiving, but most stores will have extended hours from 6 a.m. to 11 p.m. on Black Friday.
Kohl’s will be closed on Thanksgiving, but many stores will be open as early as 5 a.m. on Black Friday. Check your local location for hours.
Costco will be closed on Thanksgiving, but will reopen on Black Friday. Check your local store’s website for hours.
CVS will close early on Thanksgiving. You can call your local store or check store and pharmacy hours on the CVS Pharmacy website.
Walgreens will close most of its stores on Thanksgiving, though some 24-hour locations will be open. Check your local store for more information.
Grocery Stores
Most national grocery store chains are open on Thanksgiving for those last-minute turkey day needs, although many close early. Check your local store for details.
Travel
With most schools closed Thursday and Friday, the long Thanksgiving weekend is the busiest holiday travel period of the year, according to AAA.
AAA projects that 81.8 million people will travel at least 50 miles from home over the Thanksgiving holiday period between Tuesday, Nov. 25 and Monday, Dec. 1. That’s 1.6 million more travelers compared to last Thanksgiving, which would be a new record.
AAA estimates that at least 73 million people will travel by car, amounting to nearly 90% of Thanksgiving travelers. About 1.3 million more people will be on the road this year compared to last year, AAA predicts.
Drivers are currently paying around $3 for a gallon of regular gasoline, according to AAA. Last year, the national average was $3.06 on Thanksgiving Day.
According to AAA, 6 million U.S. travelers are expected to take domestic flights over the 7-day holiday period, a 2% increase over 2024. That figure could end up lower if flights are canceled or delayed.
Travel by other modes is expected to increase by 8.5% to nearly 2.5 million people. Other forms of travel include bus, train, and cruise ships.
NEW YORK (AP) — The U.S. stock market climbed again Tuesday on hopes for a coming cut to interest rates.
The S&P 500 rose 0.9% after breaking out of a morning lull and is back within 1.8% of its all-time high. The Dow Jones Industrial Average rallied 664 points, or 1.4%, and the Nasdaq composite gained 0.7%.
Stocks got a boost from easing yields in the bond market. Lower interest rates can cover up many sins in financial markets, including prices going too high, and hopes are strong that the Federal Reserve will cut its main interest rate at its next meeting to juice the economy further.
A raft of mixed economic data on Tuesday left traders betting on a nearly 83% probability that the Fed will cut in December, according to data from CME Group. That’s roughly the same as a day before and up sharply from the coin flip’s chance that they saw just a week ago.
Easier rates can boost the economy by encouraging households and companies to borrow more and investors to pay higher prices for investments than they would otherwise.
A third report, meanwhile, said inflation at the wholesale level was a touch worse in September than economists expected, but a closely tracked underlying trend was slightly better. That’s important because lower interest rates can make inflation worse, and high inflation is the main deterrent that could keep the Fed from cutting rates.
After taking all the data together, economists suggested the Fed and its chair, Jerome Powell, could be leaning toward cutting rates on Dec. 10. The Fed has already cut rates twice this year in hopes of shoring up the slowing job market.
“Taking a pause on rate cuts would probably do more damage to sentiment than a cut would help,” according to Brian Jacobsen, chief economist at Annex Wealth Management, who also said “Powell doesn’t need to be the Grinch that stole Christmas.”
Easier interest rates can give particularly big boosts to smaller companies, because many of them need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks jumped 2.1% to lead the market.
Elsewhere on Wall Street, several retailers leaped after delivering stronger profits for the summer than analysts expected.
Abercrombie & Fitch soared 37.5% after the apparel seller reported a better profit than expected. It also raised the bottom end of its forecasted range for revenue and profit over the full year.
Kohl’s surged 42.5% after reporting a profit for the latest quarter, when analysts were expecting a loss. Best Buy rose 5.3% after boosting its profit forecast for the full year following a better-than-expected third quarter, citing strength across computing, gaming and mobile phones.
Dick’s Sporting Goods erased an early drop of 4% to add 0.2%. It raised its forecast for results at its Dick’s stores, though its purchase of Foot Locker is requiring some work. Executive Chairman Ed Stack said the company is “cleaning out the garage” at Foot Locker by clearing inventory, closing poorly performing stores and making other moves.
Alphabet rose another 1.5%, continuing a strong run on excitement about its recently released Gemini AI model. Chinese giant Alibaba, meanwhile, saw its stock that trades in the United States fall 2.3% after losing an early gain. It reported stronger revenue than analysts expected for the latest quarter thanks in part to the AI boom, but its overall profit fell short of forecasts.
Some chip companies dropped sharply following a report from The Information that Meta Platforms is in talks to spend billions of dollars on AI chips from Alphabet instead of them. Nvidia sank 2.6% and Advanced Micro Devices dropped 4.1%.
All told, the S&P 500 rose 60.76 points to 6,765.88. The Dow Jones Industrial Average rallied 664.18 to 47,112.45, and the Nasdaq composite gained 153.59 to 23,025.59.
In the bond market, the yield on the 10-year Treasury eased to 4.00% from 4.04% late Monday.
In stock markets abroad, indexes rose across Europe and Asia. Germany’s DAX returned 1%, and stocks in Shanghai climbed 0.9% for two of the world’s bigger moves.
Pride Month merchandise is displayed at a Target store on May 31, 2023 in San Francisco, California.
Justin Sullivan | Getty Images
Even before Pride month was underway, it seems as if it was open season on companies celebrating the LGBTQ community.
One by one, companies have come under an expanding attack. Anheuser-Busch,Target, Kohl’s and VF Corp.’s North Face brand have all felt the vitriol of this latest push from the right. And the list keeps growing. These companies have been branded as “woke capitalists” — and worse — as critics urged boycotts of these companies’ products. Bud Light came into the crosshairs after it struck a partnership with trans influencer Dylan Mulvaney, while North Face received backlash for an ad featuring drag queen Pattie Gonia. Target and Kohl’s have been criticized for Pride-themed clothing.
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While it’s too early to say how successful these efforts will be in lowering sales at the companies recently drawn into this attack, damage has been done to the stocks already. And some on Wall Street expect that to continue with analysts recently downgrading Target’s and Anheuser-Bush’s ratings, citing in part the ongoing controversy.
“The main reason boycotts generally are effective is because they threaten the reputation of the company by putting the company in a negative media spotlight, and companies don’t want to have negative attention of any kind drawn to them,” said Brayden King, a professor of management and organizations, who has studied how boycotts impact company stock prices, in an interview.
King’s research focused on 133 separate boycotts launched between 1990 and 2005, in a study that was published in 2011. About a quarter of the 177 companies targeted by these actions offered a concession to protestors.
“They often concede to boycotter’s demands, not because they feel that there’s sales pressure on them, but rather because they don’t want to continue to be a target of negative media attention,” he said.
King’s research found that the stock of a company will fall about 1% each day of national print media coverage. But once the issue falls out of the daily news cycle, the stock generally recovers.
King sees Anheuser-Busch’s situation as an outlier because the controversy has harmed its sales. The company has been under fire for more than two months. Over that time, its stock is down more than 18%.
Anheuser-Busch InBev shares hit a 52-week high of $67.09 on March 31.
“With 7 weeks of data, the consumer backlash at Bud Light seems quite durable,” said Cowen analyst Vivien Azer, in a research note Friday. “This is not a surprise to us, given how violent the responses were to Bud Light on social media. Indeed, in each of the last five weeks, we have seen Miller Lite and Coors Light gain over 200 bps of market share from Bud Light (where market share fell 390 bps most recently).”
Cowen’s consumer research suggests Molson Coors will be able to maintain the market share it’s gaining.
“Relative to Miller Lite and Coors Light, the Bud Light brand seems to skew to white consumers, men, younger consumers and lower-income consumers. The income bias toward Bud Light, we believe, is a key factor in driving the durable market share gains to TAP,” Azer explained.
Molson Coors shares are up 24% over the past two months, as analysts have spotlighted the market share gains it’s making.
Bud Light has tried to win back customers with a $15 off rebate program on Budweiser, Bud Light, Bud Select and Bud Select 55. While shoppers will need to put out money for the purchases on the front end, once the rebate is processed, the product is essentially free, according to Azer.
Will this be enough to soothe angry consumers? She’s unconvinced.
“Recall there were consumers that were happy to destroy beer they had already purchased,” she said.
Budweiser beer in the brewery section at a Walmart Supercenter on March 02, 2023 in Austin, Texas.
Brandon Bell | Getty Images
There are several factors contributing to the impact the Bud Light boycott is having on sales that are specific to the beer category, according to King. He said, the first is that a bar, restaurant or music venue could remove the product, which takes the decision away from consumer. Then, there is the social nature of drinking.
“When you’re purchasing something in private, there’s nobody looking over your shoulder to hold you accountable,” King said. However, beer may be purchased to drink with friends so there could be more social pressure, he said.
The situation with Bud Light may have put companies more on edge. Target has carried Pride month apparel for years, but when confronted with pushback this year, the retailer moved product in some stores to other areas or removed it all together, citing concerns for worker safety. But this decision also carries a risk. Target could wind up offending both sides of the issue.
“The fact that a small group of extremists are threatening disgusting and harsh violence in response to Target continuing its long-standing tradition of offering products for everyone should be a wake-up call for consumers and is a reminder that LGBTQ people, venues, and events are being attacked with threats and violence like never before,” said Sarah Kate Ellis, president and CEO of GLAAD, a LGBTQ media advocacy group, in a written statement.
The group has pushed for Target to put the Pride merchandise back on the sales floor and online, and do what it can to protect workers in the stores. Target has also received bomb threats from those claiming to support the LGBT community, who wanted the merchandise retured to the store, according to media reports.
Target’s stock hit a 52-week low on Thursday.
Target’s stock has fallen about 10% since news broke on May 24. But shares were already trending lower after the retailer’s earnings report showed weakness in parts of its business.
Meanwhile, both VF Corp. and Kohl’s shares seemed to be bouncing back on Friday. After recovering some lost ground, the North Face parent is down about 9% since it launched its “Summer of Pride” ad on May 23. Kohl’s shares rose nearly 12% on Friday, recouping nearly all of the ground it lost. But the stock sank as low as $17.89 on Thursday, its lowest level since May 22, 2020.
VF Corp. shares traded as low as $16.77 on Thursday.
Target’s stock sank to a 52-week low of $126.75 on Thursday, following a downgrade by JPMorgan to neutral. While analyst Christopher Horvers cited a weakening consumer as the primary reason that he expects tougher times ahead for the discount retailer, the recent controversies were mentioned as a factor in the decision. Horvers slashed his price target to $144 from $182.
Meanwhile, Wells Fargo analyst Edward Kelly said the recent pullback in the stock’s price might have been seen as a buying opportunity prior to this issue.
“The current stock price could have been a good entry point, but it’s hard to step in front of the current uncertainty,” Kelly wrote in a research note Thursday.
Kelly said that he has seen “early evidence of some near-term financial impact.” Among the factors he cited was Placer.ai data that showed foot traffic at Target stores was soft in the week ended May 28.
“Traffic has been a key bright spot for TGT as it struggled with margin issues, and a slowdown would be negative. It remains to be seen how long any impact would last,” Kelly said.
Even with the risk, companies will continue to tie brands to social issues because it fosters a deeper relationship with customers.
“If you build your argument to consumers only on the stuff, only on the features, only the functional utility of what it is that you do, then competitors can come in and offer that, just a copy of that, and claim that they have a better mousetrap,” said Americus Reed, a professor of marketing at the University of Pennsylvania, in an interview Wednesday on CNBC’s “Power Lunch.”
Kohl’s shares on Thursday hit a low of $17.89, the stock’s lowest level since May 22, 2020, when it traded as low as $17.19.
“So a bit of … why it is so attractive to align with purpose and these sorts of issues is that … it gives you an opportunity to link more deeply with consumers,” Reed said. Even though it can go awry, the upside can be powerful because the connection “has powerful gravitational pull,” he said.
In fact, those strong relationships are usually why boycotts fail to hurt a company’s sales longer term, according to King. He said research has shown that for every consumer that stops buying a product another shopper will begin a “buycott” by purchasing items to show their support for the opposite side of the issue.
Still, with threats coming from both sides of the issue, and stocks suffering sharp selloffs, companies may proceed a bit more cautiously.
“They may internally continue to embrace those values as important to their culture and identity, but externally they may be more risk adverse in terms of how they communicate those values,” King said.
—CNBC’s Christopher Hayes contributed to this report.
A Target department store in North Miami Beach, Florida, May 17, 2023.
Joe Raedle | Getty Images
More grocery purchases, fewer ambitious do-it-yourself projects and last-minute splurges at the store.
This week, some of the biggest retailers in the country reported earnings and described how their customers are shopping. As Home Depot, Target and Walmart reported their quarterly sales and shared full-year outlooks, the companies offered up the latest clues about the health of the American consumer and previewed what could be ahead for the economy.
Some smaller retailers also offered warning signs for the current quarter and this year.
So far, at least five retailers — Target, Walmart, Tapestry, Bath & Body Works and Foot Locker — have spoken about sales trends across the country getting worse.
As the three-month period went on, shoppers spent less, especially on discretionary merchandise, Target CEO Brian Cornell said on a call with investors. Walmart noticed the same pattern.
Both big-box retailers reported a sharp sales drop after February.
Walmart’s Chief Financial Officer John David Rainey attributed the decline, in part, to the end of pandemic-related SNAP benefits and a decrease in tax refunds.
Cornell said headline-grabbing events could have shaken consumer confidence too. He pointed to the March banking crisis. Silicon Valley Bank collapsed that month, sparking fears of broader economic woes.
Bath & Body Works saw sales fall off in March.Yet, sales recovered in April as the retailer turned to a common playbook: promotions.It got a boost as customers spent money at sales events toward the end of the quarter, CFO Wendy Arlin said on a Thursday earnings call.
Foot Locker also said it may have to motivate shoppers with markdowns for the rest of the year. The company cut its full-year forecast Friday, as it reported earnings that missed expectations. CEO Mary Dillon said in a statement, “sales have since softened meaningfully given the tough macroeconomic backdrop.”
On a call with investors Friday, Dillon said the sneaker seller’s sales got hurt by lower tax refunds and high inflation as customers spent more on food and services. While she said sales rebounded in April, “they did not improve nearly to the extent we expected, and that weakness has continued into May.”
A few other retailers that reported earnings had specific factors working in their favor.
When Tapestry, the parent company of Coach and Kate Spade, reported earnings last week, the company said sales softened as the quarter progressed and into April as consumers became more cautious.
But it has a factor going for it that some other retailers don’t: A growing business in China and other international markets to offset some of those softer sales.
Home Depot bucked the slowing sales trend, but that may have to do more with what it offers than consumer health.
Spring is peak season for home improvement. The retailer’s comparable sales in the U.S. declined 4.6% in the quarter versus the year-ago period. In February, its comparable sales were down 2.8%. March was its weakest month of the quarter, as comparable sales fell nearly 8% year over year in the U.S.
Home Depot’s trends were still negative in April but saw a slight improvement as comparable sales slid 3.7%, according to CFO Richard McPhail. Customers may have been buying more spring items such as potted plants.
Inflation is easing, according to a Labor Department report this month. Yet, that’s cold comfort for shoppers who are still paying a lot more at the grocery store than they were a few years ago.
Stubbornly high prices, especially for food, are a storm cloud that hangs over many families who shop at Walmart, and looms over the retail industry as a whole, the big-box giant’s CEO Doug McMillon said. On a call with investors Thursday, he called the persistent inflation “one of the key factors creating uncertainty for us in the back half of the year.”
“We all need those prices to come down,” he said on the call. “The persistently high rates of inflation in these categories, lasting for such a long period of time, are weighing on some of the families we serve.”
For example, he said general merchandise costs in the U.S. are lower than a year ago, but still higher than two years ago. In dry grocery and consumables categories, Walmart is seeing high single-digit to low double-digit cost inflation on items such as toilet paper or paper towels. For food, inflation has climbed more than 20% on a two-year basis, according to Walmart’s Rainey.
A shopper browses the eggs section at a Walmart store in Santa Clarita, California.
Mario Anzuoni | Reuters
Walmart is feeling the inflation crunch even though it is better positioned to manage higher costs than other retailers. As the nation’s largest retailer and biggest grocer, Walmart can use its scale to manufacture private-label merchandise or negotiatewith vendors over price.
In plenty of other categories, however, inflation is still driving a higher average ticket for customers, Home Depot CEO Ted Decker said on an earnings call Tuesday.
Target, Home Depot and Walmart all saw a noticeable pattern: fewer pricey and fun items in shopping carts.
At Home Depot, customers boughtfewer big-ticket items such as appliances and grills in the fiscal first quarter.
Home projects got more modest, too, Decker said on an investor call. Contractors and other home professionals noticed a change from large-scale remodels to smaller renovations and repairs.
Decker said consumers’ increased focus on value could be contributing to that shift, along with an uptick in spending on traveling, dining out and other services. He added some homeowners already tackled big projects and bought some high-priced home items during the early years of the Covid-19 pandemic, leaving less for them to do or to buy now.
The trend extended beyond home improvement.
Customers at Walmart have become more selective when shopping for electronics, TVs, home items and apparel, Rainey told CNBC. The items have become a tougher sell and when customers do buy them, they often wait for a sale, he said.
At Target, sales declined in some discretionary categories as much as low double-digits as customers bought less clothing and home decor, Chief Growth Officer Christina Hennington said on an investor call. Groceries and essentials drove a bigger portion of the retailer’s quarterly sales.
One exception? Beauty. Hennington said Target’s beauty category was its strongest in the fiscal first quarter. Sales grew in the mid-teens year over year, showing shoppers are still willing to replenish the cosmetic case and get a new tube of lipstick.
Walmart is eager for warmer weather too. Sam’s Club has noticed slower sales of patio sets, perhaps because of the later-to-hit spring weather, its CEO Kath McLay said on an investor call. Walmart has seen a sharp drop in air conditioner sales at its big-box stores, its CFO Rainey said.
“We’re ready to get some spring or summer weather,” he said on a call with CNBC.
Target noted it’s looking forward to another upcoming season: back-to-school.
The discounter expects to get a sales boost in the back half of the year due to the big shopping season, Hennington said on an investor call. She said the return to classrooms and college dorms triggers sales across almost every department of its store, from lunch ingredients in the grocery aisles to new outfits in the kids’ clothing department.
Retailers may be saying so long to the days of stockpiling and early shopping.
Company leaders said there are signs shoppers are reverting to some of their old ways.
At Walmart-owned Sam’s Club, McLay said shoppers are not just opting for lower price points. They’re also shopping later for seasonal items. For example, she said, customers used to buy patio furniture just as soon as it was set at the stores.
“Now we’re seeing people wait a little bit later into the season,” she said.
It saw a similar pattern with Mother’s Day sales, she said.
McLay said that may indicate people have returned to shopping habits of 2018 and 2019. The trend could be fueled by shoppers’ reluctance to open their wallets or because they’re not as worried about out-of-stock items — or a combination.
At Target, shoppers have also embraced more procrastinator tendencies, especially for discretionary items such as apparel.
“Guests are shifting to shop more just in time in these categories, as they wait until the last moments before key events to invest in new decor or wardrobe refreshes,” Hennington said on an earnings call.
Stocks are coming off a strong week, thanks in large part to a cooler-than-expected inflation reading that prompted hopes of lighter rate hikes from the Federal Reserve. The S&P 500 had its best week since June, while the Nasdaq had its best frame since March. Even with the Democrats holding the Senate (more on that below) there is still strong potential for the GOP to win the House and usher in gridlock in Washington, which would likely limit new regulations and tax increases. Still, Fed officials are cautioning that it could take a while for the central bank to bring inflation to heel. “Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there,” Fed Governor Christopher Waller said Sunday. Read live market updates here.
U.S. Senate Democratic leader Chuck Schumer (D-NY) speaks at a U.S. midterm election night party for New York Governor Kathy Hochul in New York, New York, U.S. November 8, 2022.
Brendan McDermid | Reuters
The U.S. Senate will remain in Democrats’ hands after their incumbents in Arizona and Nevada – Mark Kelly and Catherine Cortez Masto, respectively – were projected to win their races over the weekend. Those victories once again give Democrats 50 votes in the chamber, good enough for a majority, with Vice President Kamala Harris acting as the tie-breaker. The party could boost its leverage a bit more with a win in December’s runoff between Georgia Sen. Raphael Warnock and his Republican challenger, Herschel Walker. That would take some power away from centrist Sen. Kyrsten Sinema, D-Ariz., and conservative West Virginia Democratic Sen. Joe Manchin, but they would remain pivotal on tight votes. Even if the House flips Republican, Democratic control of the Senate will make it easier for Biden to appoint judges and new Cabinet members.
Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington, D.C., on Wednesday, Feb. 9, 2022.
Sarah Silbiger/ | Bloomberg | Getty Images
There’s been a whilrwind of revelations and developments since fallen investor Sam Bankman-Fried’s crypto company FTX filed for bankruptcy Friday. The company, now under the control of new CEO and restructuring chief John Ray, clamped down on trading and withdrawals after a series of “unauthorized transactions” took place soon after it declared bankruptcy. Meanwhile, new CNBC reporting says Alameda, a trading firm that Bankman-Fried founded, quietly used billions of dollars in customer funds from FTX in a manner that evaded the attention of investors, employees and auditors. Bankman-Fried, who had donated millions to Democratic political causes, also came under fire from Washington, signaling a major shift for the crypto industry. His downfall has prompted calls for stronger scrutiny from the right and left alike.
Signage at a Walmart store in Secaucus, New Jersey.
Lucas Jackson | Reuters
It’s retailers’ turn in the earnings spotlight, and it couldn’t be a more crucial time for the industry. The holiday shopping season is practically under way, even though Black Friday is just under two weeks away. This week, investors will get a clearer picture of how well retailers are drawing customers, as well as whether the companies are having any success plowing through piles of unwanted inventory at steep markdowns. writes CNBC’s Melissa Repko. Here is a schedule of retailers’ earnings reports this week:
U.S. President Joe Biden and Chinese President Xi Jinping met Monday in Bali on Nov. 14, 2022.
Saul Loeb | Afp | Getty Images
President Joe Biden on Monday met face-to-face with his Chinese counterpart, Xi Jinping, for the first time since he moved into the White House in January 2021. While the two presidents have spoken through multiple video conferences and calls, the in-person meeting ahead of the G-20 summit comes at a particularly tense time, between concerns over Taiwan and the Russian invasion of Ukraine, among other things. “We need to find the right direction for the bilateral relationship going forward and elevate the relationship,” Xi said, while Biden stressed that the two countries can compete without it turning into a conflict.
Bob Chapek, Disney CEO at the Boston College Chief Executives Club, November 15, 2021.
Charles Krupa | AP
“Black Panther: Wakanda Forever” might have had a huge opening weekend, but cost cuts are coming to Disney. In a memo obtained by CNBC on Friday, CEO Bob Chapek told his division leaders that Disney, which is coming off a rough earnings report, would seek to trim spending across the company. That means a targeted hiring freeze, limits on travel and eventual staff cuts, Chapek wrote in the memo, which you can read here.
– CNBC’s Yun Li, Kevin Breuninger, Jacob Pramuk, Kate Rooney, MacKenzie Sigalos, Paige Tortorelli, Brian Schwartz, Melissa Repko, Evelyn Cheng and Alex Sherman contributed to this report.
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The stock market’s rally after October’s inflation report will be tested in the week ahead, as investors watch some major retailers’ earnings and a flurry of Federal Reserve speakers. But the main event is the market itself and whether it can turn a supercharged move higher into a more lasting rally that lifts stocks into the end of the year. The major averages were higher again Friday after a cooler-than-expected consumer price index Thursday triggered the best day for stocks in two years. CPI for October was up 7.7% over a year ago, lower than the 7.9% pace expected. Stocks finished the week with strong gains Friday afternoon. The tech sector was up 10% for the week. The Nasdaq Composite powered ahead of other indexes, and was up more than 8% for the week. This week, bond yields also came off their highs and were sharply lower, paving the way for gains in tech and growth shares. “The CPI was better than expected, elections came out with minor gridlock, earnings haven’t been a disaster,” said Art Hogan, chief market strategist at B. Riley Financial. “It just shows there’s probably support for equities, and the calendar is favorable. The midterm election cycle has a perfect track record of being better six months down the road.” Market pros will continue to watch for any spillover from the selloff in cryptocurrencies, following the dramatic implosion of crypto exchange FTX. FTX filed bankruptcy Friday. “There’s a correlation between the crypto correction and risk assets…The FTX wipeout is not the last we hear of it,” said Hogan. “There’s probably linkages to other players, but it’s hard to know.” What to watch Earnings are expected from Walmart and Home Depot Tuesday, Other retailers, like Target and Macy’s also report that week. Those store chains should provide a look at how consumers are dealing with higher interest rates and inflation. Another glimpse at consumer behavior will come when the Census Bureau releases October retail sales report, expected Wednesday. According to Dow Jones, it is expected to show a 1.2% jump in retail sales, up from a flat result the month before. Real estate data will also be released, with housing starts Thursday and existing home sales Friday. Both are expected to be weaker as rising mortgage rates take a toll on the sector. The Empire State manufacturing survey is released Tuesday, and the Philadelphia Fed manufacturing survey is released Thursday. “I’m going to be watching retail sales for sure, and we get our first November industrial numbers with the New York and Philly Fed,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “To me, those are the most relevant things and then technically to see if there’s any follow-through on bonds and whether the Treasury move has more to it.” On the geopolitical front, any progress from a meeting in Indonesia Monday between President Joe Biden and China President Xi Jinping could be positive for market sentiment. “I understand the angst with China, but it’s in nobody’s interest to be be going head-to-head with the second biggest economy. if anything could just cool tempers, that would be a good thing,” Boockvar said. Reprieve from rising rates Investors will also be watching closely to see if the reprieve from rising rates in the Treasury market continues in the coming week. The closely watched benchmark 10-year yield ended Thursday at 3.81%, after falling more than 30 basis points after the CPI report. [A basis point equals 0.01 of a percentage point]. The cash bond market was closed Friday for Veterans’ Day. “Was that a relief rally and that was it? People are going to feel much more comfortable with the 10-year yield below 4% than above 4%,” said Boockvar. The 10-year is key since it influences mortgage rates and many consumer and business loans. The drop in the 10-year yield, which moves opposite price, also helped drive a sharp rally in tech and growth names. Those high-priced stocks, which are priced on future earnings, benefit most from low rates and cheap money. The test for yields could come in the first days of the coming week. The action in stocks will be important, as market pros watch to see if the rally has legs or is derailed by the parade of Fed speakers. They include Fed Vice Chair Lael Brainard, New York Fed President John Williams and Minneapolis Fed President Neel Kashkari to name a few. “Everybody on the Fed is hawkish. There’s just a degree of hawkishness — moderate and uber,” said Hogan. “I think the market has started to pay increasing attention to the growing chorus of moderate hawks.” Hogan said that group includes Bullard, Brainard and San Francisco Fed President Mary Daly. “I think that group grows next week,” he said. Hogan said Fed officials could push the message that the central bank is slowing its hiking pace but will continue to hold rates high. The Fed announced it could hike by 50 basis points as soon as the December meeting, following four 75 basis point hikes. The message would be “let’s slow the pace, and see if there’s any effect,” said Hogan. “It’s a well-known fact that monetary policy has long and variable lags.” Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, said the market could be getting ahead itself in its bullishness over the inflation report. “CPI beat by two ticks. What if it misses by two ticks next month?” he said. Christopher said the Fed will ultimately stop raising rates but will not cut them, and stocks will face even more challenges this year. “I think the market is probably going to reevaluate itself after its euphoria… You still have to get through another inflation report and another Fed meeting,” he said. “Inflation is still pretty sticky at services level,” he said. “…We think illiquidity is what comes next.” Technically speaking There’s an active debate in the market as to whether the surge Thursday was the start of a year-end rally, since the market has mostly been positive in the fourth quarter of midterm election years. Many strategists are calling the move higher a bear market rally, and some expect it will fizzle in December while others say it could continue into the new year. “Thursday’s surge surpassed even what options markets were expecting for volatility post CPI. Equities, Treasuries and currencies all showed some of the largest movement seen in years. [The S & P 500’s] move above late October highs puts a major decline on the back burner for the time being,” writes Mark Newton, Fundstrat head of technical strategy. The S & P 500 gained 5.5% Thursday, its best day since April 2020. “The real question of whether ‘the low’ is in all has to do with whether Technology has truly bottomed along with Treasuries. I’m inclined to say no on both counts,” Newton wrote in a note. Newton said he expects stocks could continue to trend higher for now, and 4,100 on the S & P 500 is a strong resistance level. “If reached into early December, one would consider that an area where [the S & P 500] should stall out and backtrack into 2023,” he noted. For short-term investors, he advises them to stay bullish unless 3,859 is broken and then watch for 3,700 below that. Newton points out that peaks in August, September and October were reached mid-month, while June and July saw mid-month troughs. He said that suggests there could be a short-term top leading to weakness on Nov. 22 and 23. “My take is that selloffs into that time should be buyable, and it will only be necessary to truly turn bearish again if 3,700 is broken which might not occur until next year,” he added. Week ahead calendar Monday Earnings: Tyson Foods, BuzzFeed, ThredUp , Oatly, Aecom 11:30 a.m. Fed Vice Chair Lael Brainard 6:30 p.m. New York Fed President John Williams Tuesday Earnings: Walmart, Home Depot , Vodafone, Krispy Kreme, Tencent Music, Valvoline, Energizer, Aramark, Advance Auto Parts 8:30 a.m. PPI 8:30 a.m. Empire State manufacturing 9:00 a.m. Philadelphia Fed President Patrick Harker 9:00 a.m. Fed Governor Lisa Cook 10:00 a.m. Fed Vice Chair for Supervision Michael Barr at Senate Banking Wednesday Earnings: Target, Cisco , Lowe’s, Tencent Holdings, Shoe Carnival , TX, Grab Holdings, NVIDIA , Copa Holdings, Bath and Body Works, Sonos 8:30 a.m. Retail sales 8:30 a.m. Import prices 8:30 a.m. Business leaders survey 9:15 a.m. Industrial production 9:50 a.m. New York Fed’s Williams 10:00 a.m. Fed Governor Barr at House Committee on Financial Services 10:00 a.m. Business inventories 10:00 a.m. NAHB survey 2:35 p.m. Fed Governor Christopher Waller 4:00 p.m. TIC data Thursday Earnings: Applied Materials , Alibaba, Macy’s, Siemens, Burbery, BJ’s Wholesale, Kohl’s, NetEase, Pershing Square, Weibo, Gap, Palo Alto Networks, Ross Stores, Post Holdings 7:30 a.m. Atlanta Fed President Raphael Bostic 8:00 a.m. St. Louis Fed President James Bullard 8:30 a.m. Initial claims 8:30 a.m. Housing starts 8:30 a.m. Philadelphia Fed manufacturing 9:15 a.m. Fed Governor Michelle Bowman 9:40 a.m. Cleveland Fed President Loretta Mester 10:40 a.m. Fed Governor Philip Jefferson and Minneapolis Fed President Neel Kashkari 1:45 p.m. Minneapolis Fed’s Kashkari 6:15 p.m. Chicago Fed President Charles Evans, Fed Chair Jerome Powell, San Francisco Fed President Mary Daly, and New York Fed’s Williams at event celebrating Evans. No policy comments are expected. Friday Earnings: JD.com, Foot Locker, Buckle 8:40 a.m. Boston Fed President Susan Collins 10:00 a.m. Existing home sales 10:00 a.m. Leading index 10:00 a.m. Quarterly services survey
