The central theses
- After a shortened Thanksgiving holiday week, markets are returning to a busy schedule.
- The October personal consumption expenditures (PCE) index will be released on Tuesday, giving investors an update on inflation ahead of the Fed’s mid-December meeting.
- Salesforce reports its results on Thursday, while Intuit, Workday, Crowdstrike, Dollar Tree and Five Below will also report this week.
- November’s consumer confidence index will be released on Tuesday, while market watchers will see the first revisions to U.S. gross domestic product for the third quarter on Wednesday.
After the Thanksgiving holiday and Black Friday sales, US markets will be back in action this week as market watchers will see the latest inflation data while a handful of big-name companies will report earnings.
The most watched event of the week will likely be the latest release of inflation data, as the Personal Consumption Expenditure (PCE) index will provide insight into the effectiveness of the Federal Reserve’s campaign to combat inflation by raising interest rates. It will likely help inform the Federal Open Market Committee (FOMC) ahead of its upcoming meeting on December 12th and 13th where it will review interest rates.
Investors also receive reports on new home sales, September home price index, October new and pending home sales, and November consumer confidence. The first revisions to US gross domestic product for the third quarter will be released on Wednesday.
The week will feature a range of gains from the technology, financial and retail sectors, led by customer relationship management company Salesforce on Wednesday, but also tax service provider Intuit, cloud enterprise management company Workday, cybersecurity provider Crowdstrike and retailer Dollar Tree and Five Below hired to report.
Week of November 27th:
Monday, November 27th
- Earnings from Zscaler (ZS).
- Sales of new houses (October)
Tuesday, November 28th
- Intuit (INTU), Workday (WDAY), CrowdStrike (CRWD) and Splunk (SPLK) report earnings.
- S&P Case-Shiller Home Price Index (September)
- Consumer Confidence (November)
Wednesday, November 29th
- Salesforce (CRM), Synopsys (SNPS), Snowflake (SNOW), Dollar Tree (DLTR), Hormel Foods Corporation (HRL), Okta (OKTA), Pure Storage (PSTG) and Five Below (FIVE) are reporting earnings.
- Q3 US gross domestic product (GDP) (first revision)
- Advanced US Merchandise Trade Balance (October)
- Expanded wholesale stocks (October)
- Retail pre-sale stocks (October)
- Federal Reserve Beige Book
Thursday, November 30th
- Dell Technologies (DELL), Marvell Technology (MRVL), Kroger Company (KR), Ulta Beauty (ULTA), Royal Bank Of Canada (RY), TD Bank (TD) and CIBC (CM) report earnings.
- Initial Jobless Claims (Week Ending November 25)
- Personal Consumption Expenditure (PCE) Index (October)
- Pending Home Sales (October)
Friday, December 1st
- Genesco (GCO) reports earnings.
- ISM production (November)
- Construction expenditure (October)
- Car sales (November)
Markets are watching PCE for inflation clues
The Personal Consumption Expenditure (PCE) index, a preferred inflation indicator of the Fed, will provide the latest insight into prices for markets expecting inflation to decline.
The PCE reading comes after another inflation indicator – the consumer price index (CPI) – came in lower than expected at 3.2% in October, a sharp decline from September’s 3.7% reading.
Thursday’s release of the PCE index will provide insight into whether consumer prices will fall further, and the Fed will closely examine the data in the report ahead of the Federal Open Market Committee’s meeting on December 12-13. The next CPI report will be released on December 12th.
The Fed raised interest rates to 5.25% to 5.5% to curb price increases in the summer of 2022, when prices averaged 9% higher than a year earlier. The Fed’s target inflation rate is 2%
After raising interest rates to a 22-year high in successive sessions, inflation rates have fallen, with PCE at 3.4% in September, the third month in a row at this level.
Despite the decline, consumers have expressed fears that inflation will continue and even worsen in the coming year.
Salesforce Results: A Glimpse of AI Progress?
Salesforce’s results on Thursday will show how the company is leveraging artificial intelligence (AI) tools to fuel growth. The company redoubled its efforts to attract AI talent when its CEO Marc Benioff offered OpenAI employees a job at Salesforce, following then-CEO Sam Altman.
The customer relationship management company is expected to post 11% revenue growth this year, according to analyst estimates from Visible Alpha.
Investors will be interested to see whether the company’s cost-cutting measures will continue to boost its results. Salesforce is coming off a second quarter, reporting an 11% jump in revenue to $8.6 billion, contributing to net income of $1.27 billion for the quarter.
In its most recent earnings report, the software company raised its full-year forecast to EPS of $8.04 to $8.06, up from previously forecast EPS of $7.41 to $7.43. Additionally, full-year revenue guidance was raised slightly to $34.7 billion to $34.8 billion. In March, the company announced an expansion of its share buyback program.
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