The enthusiasm in the wake of Donald Trump’s re-election to the oval office (with an assist from the Fed’s latest quarter-point rate cut) continues to fuel equities higher, with the major indexes achieving new high-water marks on Monday.
As we headed toward today’s opening bell, stock futures were little changed. In overnight trading, markets in Asia closed with modest losses. Meanwhile, the European indexes were also in the red. Elsewhere, oil prices have moved higher, with West Texas Intermediate crude up about 0.7%, to around $68.50 a barrel.
With most uncertainty over the elections now in the rearview mirror (several seats in the U.S. House of Representatives have not been called), investors can return to focusing on more-mundane matters. The economic docket for this week includes some important releases. On Wednesday, the Bureau of Labor Statistics will release its Consumer Price Index (CPI) for October. Wall Street expects prices for goods and services to come in around 2.4% higher on a year-over-year basis, while a smaller month-on-month increase of about 0.2% seems likely. If that turns out to be the case, both figures would match September’s readings. It’s a similar story on a “core” basis (excluding food and energy), with a 12-month increase estimated at 3.3%, and the month-over-month change at 0.3%. Again, these would both mirror September’s gains.
The outlook for the Producer Price Index (PPI), due out Thursday, is for a slight uptick. The prices of goods sold by manufacturers are anticipated to show a month-over-month change of around 0.2% for October, up from a flat reading the month before. The core percentage change is expected to inch up to 0.3%, compared to 0.2% in September.
Friday will bring retail sales tallies for last month. Analyst estimates are pointing to a 0.3% increase, versus the 0.4% recorded in September. Excluding automobiles, the core number here is forecast to increase 0.2% month-over-month, down from a 0.5% gain in September. That same day, we’ll get the Federal Reserve’s report on industrial production for October. The consensus estimate suggests a decline of 0.2%, versus a 0.3% dip the month before.
Lastly, with earnings season winding down, there are only a few big names announcing this week. These include Cisco (CSCO), which reports tomorrow, followed by Walt Disney (DIS) and Applied Materials (AMAT) on Thursday.
Summing up Monday’s moves, the Dow Jones Industrials rose 304 points, or 0.7%, the S&P gained five points (0.1%), and the tech-heavy NASDAQ advanced 11 points (0.1%), all representing new record highs. – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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