The big question after Friday’s stock-market rally was how stocks might open on Monday.
The short answer seems to be: Higher.
Does that mean the selling frenzy that hit stocks this past week is over? Give it a little time, maybe a week.
Futures trading started Sunday evening in a rush but was softening a little just before midnight ET.
It’s a week to be thankful
This week is all about holidays and maybe a little time to stop watching how your 401(k) is doing.
U.S. financial markets will be closed Thursday for Thanksgiving. Friday’s stock trading will close at 1 p.m.
Though trading hours will be regular on Wednesday, trading volumes will be seriously light because many traders and investors will depart early from their computer screens to get ahead of the holiday traffic, whether by land, sea or, most importantly, air.
And maybe they’ll be thankful just for a break. The past week was traumatic for many people watching their investments. Here’s how key markets ended:
- Standard & Poor’s 500 Index. Up 1% on Friday, down nearly 2% on the week and down 3.4% in November.
- Nasdaq Composite Index. Up 0.9%% on Friday, down 2.7% on the week and down 6.1% in November.
- Dow Jones Industrial Average. Up 1.1% on Friday, down nearly 1.9% on the week and down 2.8% in November.
- Bitcoin. Down 2.1% on Friday, down 10.3% on the week and down 20.5% so far in November.
The question many investors may have ked is: Where in the heck did this turmoil come from? Especially after Nvidia, the rockstar of semiconductors and world’s most valuable company, reported blowout earnings after Wednesday’s close. The shares opened higher on Thursday and then slid backward, taking the entire stock market with it until, finally, the Friday rally started a rally started — and held.
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Stock prices are largely determined by corporate revenue and earnings and the state of the economy. The third quarter results have proved to be quite robust. U.S. corporate revenues are tracking to show an increase of 8.4% for the quarter, according to FactSet, potentially the best quarter since the third quarter of 2022, when revenues jumped 11%.
But the selling pressure was set off because many analysts, money managers and investors began to think stocks were getting way ahead of themselves. The S&P 500 is up nearly 37% since the bottom of the Trump Tariff panic in early April. The Nasdaq is up 51% since then. Google-parent Alphabet is nearly 110%. Nvidia is up 107%.
A blunter fear is that stocks are in bubble territory and ready — or near ready — to tumble. Or maybe not.
Ray Dalio, one of the great money managers, thinks markets are in bubble territory, but probably not ready to sell. Someone must have to unload stocks for the bubble to break. That’s not happening, he said on a CNBC interview on Thursday as Nvidia was rising.
Bitcoin was overbought for most of the spring and summer, and investors, who understood the asset’s history of volatility, started to sell after its early October peak. This past week’s 10.3% slump caused its relative strength index to drop below 30 for most of the last week, a traditional signal of an asset may be oversold.
It bounced up after hitting 25 on Thursday.
Meanwhile, many Americans are unhappy. They don’t like rising retail prices, sky-high housing costs, beloved local eateries disappearing seemingly overnight, battles over healthcare and divided politics and waves of large layoffs. Warnings from corporate bosses that artificial intelligence may wipe out millions of jobs doesn’t cheer them much, either.
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What’s ahead on earnings
All that said, the week ahead is still filled with some key earnings, and many Americans will start their holiday shopping in earnest. (At least that what the likes of Walmart, Target, Macy, Best Buy and Costco are all hoping.) Automakers are heavily advertising year-end sales.
Among the key earnings to watch are:
Monday: Agilent Technologies; control-systems designer Woodward, Inc., and Zoom Communications.
Tuesday: Chipmaker Analog Devices, electronics giant Dell Technologies, cyberscaler Zscaler, retailers Best Buy, Dicks Sporting Goods and Abercrombie & Fitch, and food company J.M. Smucker.
Wednesday: Deere & Co., the farm-equipment giant and discount retailer Kohl’s.
Economic reports to watch
Now that the government is up and running, there are economic reports again. Reports form the government may reflect data that’s at least a month old, but it’s data.
The key reports are:
Tuesday: Producer Price Index from the Labor Department, retail sales from the Commerce Department and three non-government reports: the S&P Case Shiller Home-Price Index for September, the Conference Board’s Consumer Confidence Index for November and the National Association of Realtors’ Pending Home Sales Index.
Wednesday: Initial Jobless Claims for the week of Nov. 22 from the Labor Department and Durable Goods Orders, a report reflecting September data.
Friday: The Chicago Business Barometer, published by the Institute for Supply Management in the Midwest. This is often read as a proxy for the U.S. economy.
