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S&P 500 futures fall slightly ahead of more retail earnings before Thanksgiving

Traders on the floor of the NYSE, October 21, 2022.

Source: NYSE

S&P 500 futures fell slightly Sunday night ahead of a fresh batch of retail earnings to kick off a shortened Thanksgiving week.

Futures linked to the broad market index were lower by 0.1[ads1]%. Dow Jones Industrial Average futures were down 38 points, or 0.1%. Nasdaq 100 futures hovered on the flat line.

The major averages were each up a day but down a week in the previous trading session. The Dow rose nearly 200 points, or 0.6%. The S&P climbed 0.5% and the Nasdaq Composite finished just 0.01% above the flat line.

Investors have been reflecting on the strength of the latest bear market rally, which started earlier this month with the October consumer price index and gained some momentum with last week’s reading on wholesale prices. Traders last week were hung up on messages from Federal Reserve officials, who were less impressed by the numbers and reconsidered their optimism about the possibility of slowing inflation.

Ed Yardeni of Yardeni Research said that in his view, the Oct. 12 low was the bottom and the S&P 500 could rise to near 4,300 by the end of the year, he told CNBC on “Closing Bell: Overtime” Friday night. The reference index is currently 3,965.34.

“What makes the big difference in the market is the resilience of the economy, it’s been spectacular,” he said. “Everybody’s been debating whether we’re going to have a soft landing or a hard landing — in the meantime, there’s no landing at all. The consumer didn’t get the recession memo and they keep spending.”

Retail sales rose in October, but at the corporate level, Target reported slowing demand and Amazon announced it will lay off 10,000 jobs — although Home Depot and Walmart have reported strong results.

“Despite what holiday spending might suggest, retail stocks tend to be in the top three for November, but in the bottom three for December, and somewhere in the middle of the pack in January,” says Liz Young, SoFi’s investment strategist. said in a note this weekend.

“Seasonality has a place in market analysis and has some predictive power. But the power of the economic cycle is stronger, regardless of the time of year,” she added. “With 375 basis points of Fed rate hikes so far, an inverted yield curve, inflation spikes and commodity prices still part of the narrative, we can all but conclude that we are late in the economic cycle.”

This week, a historically quiet one before Thanksgiving, investors will be busy with another batch of retail earnings to digest before the start of the post-holiday shopping season. Best Buy, Nordstrom, Dick’s Sporting Goods and Dollar Tree are among the companies on deck.

Investors will also get a slew of economic reports, including durable goods, new home sales, jobless claims and consumer sentiment, as well as the release of minutes from the latest Federal Reserve meeting.

The coming week is short. The market will be closed Thursday for Thanksgiving. On Friday, the stock exchanges close at 1 p.m. ET and the bond market closes at 2 p.m. ET.

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