What To Expect in the Markets This Week

Stock markets, which have gained ground during seven consecutive weeks, are open this week with normal operating hours ahead of the next two holiday-shortened weeks. Market watchers will be focused on Friday Personal consumption expenditure (PCE) index to measure whether inflation continues its downward trend.

The latest trends in the housing market will come to light when several indicators are released this week, including homebuilder confidence, housing started, construction permits, Existing home salesand new home sales. The end Michigan Consumer Sentiment Index For this year, which covers December, it will show how Americans feel about the economy.

Several companies will report their results this week, including Nike Inc., Accenture PLC, FedEx Corp.Micron Technology Inc. and CarMax Inc.

Monday December 18

• Heico Corp. (HERE) reports earnings
• Home Builder Confidence Index (December)

Tuesday December 19

• Accenture (ACN) and FedEx (FDX) report earnings
• Start of housing (November)
• Construction permits (November)

Wednesday, December 20

• Micron technology (IN) and General Mills Inc. (NEXT) report earnings
• US Checking Account (Third Quarter)
• Existing Home Sales (November)

Thursday December 21

• Nike (OF), Cintas Corp. (CTAS), Paychex Inc. (PAYX), CarMax (KMX), and Carnival Corp. (CCL) report earnings
• Initial unemployment claims (week of December 16)
• Gross Domestic Product Review (Third Quarter)
• Philadelphia Fed Manufacturing Survey (December)
• Main US economic indicators (November)

Friday December 22

• Personal Consumption Expenditure Index (PCE) (November)
• Durable Goods Orders (November)
• S&P Preliminary US Services Purchasing Managers' Index (PMI) (December)
• US manufacturing PMI advanced by S&P (December)
• New Home Sales (November)
• Consumer Sentiment - Final (December)

PCE reading will show Fed if inflation continues to fall

He Federal Reserve seems to indicate that for the moment it has ended its rate hike campaign. Now is the time to see if prices will cooperate, as Friday's December personal consumption expenditure (PCE) index will show whether inflation continues its downward trend.

After the Federal Reserve indicated that could reduce interest rates for 75 basic points In 2024, as they try to guide the economy toward a soft landing, officials will want to see continued progress in prices. Recent readings on inflation have been positive, with the The consumer price index (CPI) falls to 3.1% in November.

The Fed's preferred reading on inflation, the PCE fell to its lowest levels since March 2021 by October, when it fell to 3%, but is still above the target inflation level of 2%. Another drop in the PCE could give Fed officials confidence that they are on track to implement those rate cuts.

Retail hits big week before Christmas holidays

In the last full week before the holiday season, retailers appear to be busy, as the latest report from the US Census Bureau showed. Retail sales rose 0.3% in November. starting in October, exceeding expectations that sales would decline.

Forecasts for the holiday shopping season have been mixedas retailers such as Walmart Inc., Target Corp. and Best Buy Co. have warned that sales may weaken during the quarter, although some analysts see an increase in holiday spending.

Retail outlets have a chance to beat those projections this week, which features two of the busiest shopping days of the year, according to retail analysts Sensormatic Solutions. Known as “Super Saturday,” December 23 is forecast to be the second busiest shopping day of the year, trailing only Black Friday after Thanksgiving. Friday, December 22 is forecast to be the fourth busiest shopping day this year.

Market watchers will also have insight into retail trading when Nike reports fiscal second-quarter earnings on Thursday, after the shoemaker posted better-than-expected profitswhile cutting its inventory, for the previous quarter.