Markets This Week, 11/6-11/10, 2023: Is the Fed Done With Lifting Rates?

Economy and Markets: The Week Ahead

This week is relatively light on economic data releases, so investors’ attention will be focused mostly on companies’ quarterly reports. Another key area of interest will be the Federal Open Market Committee (FOMC) members’ speeches. The most anticipated of these is on Thursday when Federal Reserve Chair Jerome Powell will provide his perspective on the economy and monetary policy.

Last week, the central bank’s Board of Governors opted not to raise its primary policy rates, leaving them at a 22-year high range of 5.25% to 5.5%. The decision was widely expected despite hotter-than-expected Q3 GDP growth and still-persistent inflationary pressures.

Markets cheered the Federal Reserve’s decision and were further encouraged as weaker-than-expected October jobs data reinforced investors’ belief that the central bank’s tightening cycle has reached its peak. The futures markets are now pricing in unchanged interest rate level until at least June 2024, when the Fed may begin easing its policy stance. Notably, the Fed officials underscored that job market trends will have a strong influence on its further decisions, alongside inflation expectations, financial conditions, and other important economic indicators. Investors should watch the incoming data, as it will influence the central bank’s future policy.

Last week’s Fed’s decision, as well as the data pointing at easing inflationary pressures and a decline in Treasury yields and oil prices, propelled stocks to their best week so far this year. The S&P 500 (SPX) surged 4.8% over the week, while the Nasdaq Composite (NDAQ) and the large-cap tech index Nasdaq-100 (NDX) both jumped 5.1%. The Dow Jones Industrial Average (DJIA) was up 4.1%.

The futures are pointing at another positive opening on Monday. For now, November, which is statistically a good month for stocks, looks like a complete turnaround from the previous three-month slide in stocks. However, the geopolitical and economic risks are still indisputably present. In addition, while most earnings surpassed estimates, companies’ forward guidance is trailing analysts’ projections by the largest margin since 2019, according to a Bloomberg analysis. That’s despite the fact that analysts have cut their Q4 2023 earnings projections for S&P 500 companies from 8.1% at the start of the reporting season, to their current average estimate of 3.9%.    

In this uncertain environment, investors are recommended to base their decisions on trustworthy data and analysis.

Upcoming Earnings and Dividend Announcements

The Q3 2023 reporting season is in high gear, and there are a flood of reports scheduled this week.

The most noteworthy earnings events this coming week are the reports of Walt Disney’s (DIS), Arm Holdings (ARM), Bumble (BMBL), eBay (EBAY), Gilead Sciences (GILD), GlobalFoundries (GFS), Lucid Group (LCID), Occidental Petroleum (OXY), Rivian Automotive (RIVN), Uber Technologies (UBER), Take-Two Interactive Software (TTWO), Twilio (TWLO), and Unity Software (U).

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 Intel (INTC), Las Vegas Sands (LVS), United Rentals (URI), Visa (V), Pfizer (PFE), Honeywell International (HON), Rockwell Automation (ROK), Vulcan Materials (VMC), 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:

» September’s Consumer Credit Change – Tuesday, 11/7 – This report, released by the Federal Reserve, calculates the variation in the total amount of outstanding credit that must be paid back in installments. Investors and analysts use consumer credit data to assess the extent to which consumers are using credit to pay for products and services, as the change in consumer credit has a strong correlation with both consumer confidence and expenditures. 

» November’s Michigan Consumer Sentiment Index (preliminary) – Friday, 11/10 – This report, published by the University of Michigan, portrays the results of a monthly survey of consumer confidence levels in the United States. The level of confidence affects consumer spending, which contributes about 70% of the U.S. GDP.

» November’s UoM 5-year Consumer Inflation Expectations (preliminary) – Friday, 11/10 – This report is the result of the survey conducted by the University of Michigan. The survey results convey consumers’ views of long-term inflation and are used as a component of the Fed’s calculations of the Index of Inflation Expectations.

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.