Last week the market finished green again with the S&P 500 ($SPX) (SPY) finishing up almost 1%. This makes it the 8th consecutive week with the SPY finishing higher than it opened. Two of the big events last week were the Fedex (FDX) earnings and the PCE release Friday morning. Fedex missed earnings and revised down the future forecasts which led to the stock being down over 11% after the release.
PCE also was a miss on Friday, but that is a good thing showing that the price of consumer goods is slowly starting to normalize and come down. This week we have the Christmas Holiday and very limited news releases.
Here are 5 things to watch this week in the Market.
There is a Bank Holiday for Christmas on Monday for most of the world markets and an additional Bank Holiday for most of the EU and Canada on Tuesday. Due to the Holidays, it’s possible that volume is off the entire week as Many of the larger banks operate on a smaller staff during the week between Christmas and New Year’s. This could cause any market moves in both Futures and Equities to be more exaggerated than they normally would be.
Thursday the US unemployment claims are out. While this may not move the market in a normal week, with lighter expected volume it could cause some volatility. This is more of a high-level indicator of economic health, so watching the overall trends is more important than the individual releases here.
Pending Home Sales
Housing has been in the News cycle a lot lately and still remains a large issue for a lot of new home buyers and people looking to move. Rates drive a large part of the discussion, but the continued demand for housing has helped to slow the impact of the rates on prices. Watching how the pending sales come out could be an indication of whether or not the buyers are in for a bit of a reprieve heading into the new year.
Crude Oil Inventory
Crude Oil Inventories are out at 11 am on Thursday, and heading into the coolest part of the year in the Northern Hemisphere, this could act as a predictor for oil and gas prices heading into the new year. With last week’s surprise build, if inventory keeps increasing it could be a positive sign for lower oil prices. If oil prices stay low, that could have an impact on freight and consumer pricing leading to a further cooldown in inflation.
Finally out on Friday at 9:45 am is the Chicago PMI, and just like the other PMI numbers, it is an index of overall business activity. Last month’s release was over 50 signaling some expanding business activity, if this month has the some it’s possible we are starting to trend in a positive direction and the Fed may be correct that we are in for a soft landing. If we get a contraction though, that would signal last month was an anomaly and we are still shrinking as an economy.