In this holiday-shortened week, investors’ attention will be split between the Federal Reserve’s Minutes from its last policy meeting, published on Tuesday, and Nvidia’s (NVDA) earnings report, due after Tuesday’s close. Nvidia’s quarterly results will provide clues about the short-term outlook for the whole semiconductor industry, and the changes in volumes of AI-related infrastructure investments.
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The release of the Minutes of the Federal Open Market Committee (FOMC) is usually a very important market-moving event, wherein investors gain insight into the Fed members’ decision-making and get some clues about the outline of its future policy. This time, however, it may be less impactful, as the economic data published after the central bank’s November 1 meeting supported the widely held expectations that the rate-hiking cycle has ended. Particularly, slowing inflation rates and softening job-market data have reinforced the view that the Fed will begin cutting rates as early as May 2024. However, this outlook can’t be taken for granted, as there’s enough time until then for the economic or some other unexpected developments to force the Fed’s hand in either direction. In any case, investors are strongly advised to closely follow economic reports and to base their decisions on trustworthy data and analysis.
Futures markets are undecided regarding this week’s direction after last week’s strong rally in all major indexes amid improving market sentiment. Friday’s trading session was unusually quiet, lacking any noteworthy news; stocks managed to close the day with minor increases, wrapping up a third straight week of gains.
The Nasdaq Composite (NDAQ) surged 3.1% last week, the Nasdaq-100 (NDX) and the S&P 500 (SPX) both jumped 2.7%, and the Dow Jones Industrial Average (DJIA) gained 2%. The biggest winner of the last week was the small-cap index Russell 2000, which exploded 6.2% on the week, the move that pushed it from a loss year-to-date to a 2.7% gain.
Meanwhile, according to the FactSet data, the S&P 500 companies have logged in a 4.1% earnings growth in the third quarter; the next quarter’s growth is expected to come in even lower, at 3.2%. This is in line with the expected pronounced slowdown in economic growth after a strong showing in Q3. Bloomberg’s survey results pencil in an annualized 0.7% GDP increase this quarter, a considerable downturn from last quarter’s 4.9% growth. FactSet’s analysts predict that the S&P 500 companies’ earnings growth will rebound starting Q1 2024.
Upcoming Earnings and Dividend Announcements
The Q3 2023 reporting is drawing to an end, but there are still some important reports scheduled this week, with the most market-moving one being that of Nvidia (NVDA).
Other noteworthy earnings events this coming week are the reports of Abercrombie & Fitch (ANF), Zoom Video Communications (ZM), Keysight Technologies (KEYS), Analog Devices (ADI), Baidu (BIDU), Best Buy (BBY), Lowe’s (LOW), Medtronic (MDT), and Deere (DE).
Companies’ reporting dates, consensus EPS forecasts, past data, analyst ratings, and price targets can be found on the TipRanks Earnings Calendar.
This week, Ex-Dividend dates are coming for the payouts of Johnson & Johnson (JNJ), DR Horton (DHI), Microchip (MCHP), Applied Materials (AMAT), Moody’s (MCO), Northrop Grumman (NOC), Paycom (PAYC), and other dividend-paying firms.
Companies’ Ex-Dividend and Dividend Payment dates, analyst ratings, and price targets can be found on the TipRanks Dividend Calendar.
Upcoming Economic Calendar Events
There are several important reports scheduled to be published in the next few days:
» October’s Durable Goods Orders – Wednesday, 11/22 – This report, released by the U.S. Census Bureau, measures the cost of orders received by manufacturers for durable goods, such as vehicles and electrical appliances. As those durable products often involve large investments, they are sensitive to the economic situation. The report helps assess the state of U.S. production activity and draw an outlook for the demand for big-ticket goods, which is dependent on the forecasted state of the consumer and the economy in general.
» November’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Wednesday, 11/22 – These reports, published by the University of Michigan, portray the results of a monthly survey of consumer confidence levels and consumers’ views of long-term inflation in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP. The inflation expectations index is used as a component of the Fed’s calculations of the Index of Inflation Expectations.
» November’s S&P Global Manufacturing PMI and Services PMI (preliminary readings) – Friday, 11/24 – The Manufacturing PMI captures business conditions in the manufacturing sector, which contributes a significant part of total GDP; thus, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the U.S. Services PMI captures business conditions in the services sector; it is a crucial indicator since the services sector is responsible for almost 80% of total U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions since the direction and rate of change in the PMIs usually precede changes in the overall economy.
Current and scheduled economic reports, Fed statements, and other releases, as well as their level of impact on the stock markets, can be found on the TipRanks Economic Calendar.
