Stocks began the holiday-shortened week on a strong note, highlighted by new records for the Dow Jones Industrials, S&P 500, and the Russell 2000. In large part, it appears that investors applauded President-elect Donald Trump’s recent nomination of Scott Bessent for the position of Treasury secretary. However, the futures this morning were suggesting that the major indexes might give back some of yesterday’s gains. In overnight trading, markets in Asia closed mostly lower, and the European indexes were also down.
On the economic front, the Census Bureau reported this morning that U.S. building permits for October came in at a rate of 1.419 million units. This was just ahead of the Street’s call of 1.416 million, but short of the 1.425 million recorded in September. Later today, we’re due to get the number for new home sales in October. Analysts there are looking for the tally to notch down to 724,000, versus 738,000 the month before. Additionally, the minutes from the Fed’s policy meeting earlier this month are also coming out that day.
Wednesday’s busy schedule ahead of Thanksgiving Day is headlined by the Personal Consumption Expenditure Price Index (PCE) for October. Wall Street is looking for the Fed’s preferred inflation measure to show a month-to-month increase of 0.2%, which would match September’s reading. Meanwhile, the so-called “core” figure, which excludes food and energy costs, is also expected to come in flat with the month before, at 0.3%. If these figures come in close to the mark, they are unlikely to move the needle much in terms of the central bank’s next move. The fed fund futures are indicating a greater than 55% chance of another quarter-point rate cut, to a range of 4.25%-4.50%, at the final meeting of the year in December.
We’ll also get durable goods orders for October. Traders are looking for a dip of 0.8%, compared to a 0.7% decline the month before. However, the core number (which excludes transportation equipment) is expected to show a month-over-month increase of 0.4%, down slightly from the 0.5% gain in September. The same day, the National Association of Realtors will release its tallies for pending home sales. Analysts anticipate that the number fell 1.7% last month, versus an increase of 7.4% in September. Lastly, we’ll also get the Department of Labor’s report on initial jobless claims. Forecasts are suggesting the number will increase to 220,000, versus 213,000 the week before.
Summing up Monday’s moves for the major stock indexes, the Dow Jones Industrials gained 440 points, or 1.0%, while the S&P was up 18 points (0.3%), and the NASDAQ advanced 51 points (0.3%). – 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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