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Economic data — What to know in markets Wednesday

Heidi Chung

A slew of economic reports will keep investors busy Wednesday ahead of the Thanksgiving holiday.

The October data durable goods orders are scheduled to be released ahead of the market open, while personal income and spending reports plus pending home sales data for October will be released shortly after the opening bell. The Federal Reserve’s latest Beige Book is expected in the afternoon.

Analysts expect the recently-ended General Motors (GM) strike to have negatively impacted transport orders last month. Headline durable goods orders are expected to have declined 0.7%, while durable goods orders excluding transportation are expected to have risen 0.2%.

“Instead, the big distortion to the October data comes courtesy of the GM strike, with the related slump in auto output set to weigh heavily on orders too,” Capital Economics wrote in a note to clients Friday. “We estimate that dragged overall transport orders down 5% m/m last month, though that will be reversed in November and December.”

Shoppers clutch their Nordstrom bags as pre-Thanksgiving and Christmas holiday shopping accelerates at the King of Prussia Mall in King of Prussia, Pennsylvania, U.S. November 22, 2019. REUTERS/Mark Makela

Wells Fargo economists noted that much like consumer confidence, personal spending is growing albeit at a slower pace. “Retail sales for October have already been released, and retailers reported a 0.3% increase, though some of that improvement was attributable to rising prices. Still, a number of retailers have beat expectations in recent corporate earnings reports. We are looking for an above-consensus gain in spending, though the real (inflation-adjusted) spending number will be smaller,” the firm wrote to clients Friday. Consensus expectations for personal spending are for a 0.3% gain in October, up from 0.2% in September.

Meanwhile, pending home sales for October are expected to illustrate an improving housing market. “Recent housing market data suggest an improvement in activity, supported by lower long-term interest rates. On a year-on-year basis, pending home sales increased strongly in September and August,” Nomura wrote in a note Friday. “We expect pending sales growth to continue in the near term, as the housing market improves, and to ultimately lift sale closings.” Nevertheless, economists note that data month-to-month could be volatile due to supply constraints.

Some of the notable earnings reports scheduled for Wednesday include Deere (DE) before the market open and HP Inc (HPQ) after the market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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