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Stocks waver as traders await Fed speech, earnings reports

earnings reports

The Dow Jones Industrial Average rose 116 points, or 0.27%, the S&P 500 shed 0.35% and the Nasdaq Composite fell 063%

Stocks wavered Monday during a short week for the Thanksgiving holiday as traders looked ahead to speeches from the Federal Reserve and earnings reports.

The Dow Jones Industrial Average rose 116 points, or 0.27%, led by shares of Disney, which popped 8.7% after announcing that Bob Iger will replace Bob Chapek as CEO. The S&P 500 shed 0.35% and the Nasdaq Composite fell 063%.

Investors have been reflecting on the strength of a recent bear market rally, which kicked off earlier in the month with the October consumer price index reading and gained some steam with last week’s reading on wholesale prices.

Traders last week were hung up on messaging from Federal Reserve officials, who were less impressed with the figures and reassessed their optimism around the possibility of slowing inflation. The market will get more Fedspeak to digest when Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard speak Tuesday.

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

Despite what holiday season spending may suggest, retail stocks tend to be in the top three for November, but in the bottom three for December, and somewhere middle-of-the-pack in January, Liz Young, SoFi’s chief 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, no matter the time of year, she added. With 375 basis points of Fed rate hikes so far, an inverted yield curve, spikes in inflation, and commodity prices still a part of the narrative, we can all but conclude that we are late in the economic cycle.

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