It will be a shortened trading week with U.S. markets closed on Thursday in observance of the Thanksgiving holiday. Markets will close at 1 p.m. on Friday.
Investors will be monitoring the U.S.-China trade war, consumer confidence and Black Friday in the week ahead.
Both the U.S. and China have expressed a willingness to come to a “phase one” trade deal; however, the two have not yet signed any agreement. While some reports have suggested that a phase one trade deal is unlikely to come to fruition this year, President Trump told Fox News on Friday that the two feuding nations were “potentially very close” to a trade deal.
Wall Street isn’t convinced that a trade deal could be imminent. “Mixed reports this week about the prospects of a Phase I trade deal took some of the steam out of the recent market rally,” Wells Fargo wrote in a note to clients Friday. “We continue to expect a stalemate, while recognizing the significant downside risks of a deterioration in trade negotiations.” Wells Fargo noted that it still expects the additional tariffs to go into effect December 15.
Meanwhile, the consumer will be in focus this week. The Conference Board’s consumer confidence reading for November will be released Tuesday. Economists polled by Bloomberg expect consumer confidence to jump to 127.0 during the month, up from the 125.9 in October.
“A new high in the stock market, solid employment data, and declines in gasoline prices should boost consumer optimism,” Credit Suisse said in a note Thursday. “Consumers have been resilient throughout the trade conflict, as confidence has remained high in a tight range for the past year, a stark comparison to the sharp deterioration in business optimism.”
The holiday shopping season is well underway. According to a recent survey by the National Retail Federation (NRF), well over 56% of consumers started their holiday shopping during the first week of November. Nevertheless, Black Friday kicks off the busiest shopping weekend of the year and this year is no exception. The NRF estimated that 165.3 million people are expected to shop Thanksgiving Day through Cyber Monday. 114 million of those consumers are planning to shop on Black Friday.
“The tradition of Thanksgiving weekend holiday shopping has become a five-day event with consumers spending money in stores, supporting local small businesses, and online with their mobile devices and computers,” NRF President and CEO Matthew Shay said. “Even as people are starting to purchase gifts earlier in the season, consumers still enjoy finding good Thanksgiving deals and passing time shopping with family and friends over the long holiday weekend.”
Some of the big retail names gearing up to report earnings this week include Best Buy, Burlington Stores, Dick’s Sporting Goods, PVH, Abercrombie & Fitch and Dollar Tree.
Monday: Chicago Fed National Activity Index, October (-0.20 expected, -0.45 in September); Dallas Fed Manufacturing Activity, November (-3.5 expected, -5.1 in October)
Tuesday: Wholesale Inventories month-on-month, October preliminary (-0.4% prior); FHFA House Price Index month-on-month, September (0.4% expected, 0.2% in August); Richmond Fed Manufacturing Index, November (6 expected, 8 in October); New Home Sales, October (708,000 expected, 701,000 in September); Conference Board Consumer Confidence, November (127.0 expected, 125.9 in October)
Wednesday: MBA Mortgage Applications, week ended November 22 (-2.2 prior); GDP Annualized quarter-on-quarter, Q3 second reading (1.9% expected, 1.9% prior); Personal Consumption, Q3 second reading (2.8% expected, 2.9% prior); GDP Price Index, Q3 second reading (1.7% expected, 1.7% prior); Core PCE quarter-on-quarter, Q3 second reading (2.2% prior); Durable Goods Orders, October preliminary (-0.7% expected, -1.2% prior); Durables excluding Transportation, October preliminary (0.2% expected, -0.4% prior); Capital Goods Orders Nondefense excluding Air, October preliminary (-0.3% expected, -0.6% prior); Initial Jobless Claims, week ended November 23 (220,000 expected, 227,000 prior); Continuing Claims, week ended November 16 (1.695 million prior); MNI Chicago PMI, November (47.0 expected, 43.2 in October); Bloomberg Consumer Comfort, week ended November 24 (59.1 prior); Personal Income, October (0.3% expected, 0.3% in September); Personal Spending, October (0.3% expected, 0.2% in September); Pending Home Sales month-on-month, October (0.0% expected, 1.5% in September)
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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