It’s Friday and that means it’s time for the weekly roundtable, brought to you by Yahoo Finance’s Aaron Task, Michael Santoli and Jeff Macke.
Next week is the last full week before the holiday season officially kicks off, and we bet you’ll want to make it count—here’s what you need to know before Monday morning.
Markets
Markets are nearly at all-time highs, “it’s one of those historic runs where the market refuses to back off. But I do think there are some things you need to be cognizant of that are happening underneath the surface,” says Santoli. One of those things is that the high-yield, junk bond market has been softening up.
It’s not a big deal or systemic problem in the bond market, says Santoli, “BUT the last time this happened and the time before that stocks tried to shrug it off and then ultimately if it worsens further it’s an excuse for stocks to back off.”
For at least the last two years, the high yield market has been at the center of the strength of the finance system, he says. Whenever there is some sort of hiccup, it brings in the other markets.
Alibaba and Twitter are both eyeing bond offerings which is an example of how flush the market currently is. “This is the top of the corporate bond market,” says Santoli.
Retail
Thanksgiving marks the official start of the holiday shopping season (although some would argue that it has already started). Jeff Macke is looking at retail. “The results have been meh,” he says. “And that’s what happens when companies start promoting for Christmas right around August…it reduces your margins”
Walmart is up 5% even though their guidance wasn’t particularly great. “It was the first time that comps have gone positive in six odd quarters,” says Macke. “This is a company that is promoting aggressively. Their body language is good, they had a great Halloween and that’s huge and they just seem to be something that’s consolidated long enough.”
