Monday November 21st

U.S. stock markets index futures fell Monday ahead of another batch of retail earnings to kick off a shortened week for the Thanksgiving holiday. Futures tied to the Dow Jones Industrial Average dipped 18 points, or 0.05%. S&P 500 and Nasdaq 100 futures slid 0.31% and 0.47%, respectively. Disney bucked the negative trend, however, rising more than 8% after the media giant announced that Bob Iger would return as CEO, effective immediately. Investors have been reflecting on the strength of a recent bear market rally, which kicked off earlier in the month with the October consumer price index reading and gained some steam with last week’s reading on wholesale prices. Traders last week were hung up on messaging from Federal Reserve officials, who were less impressed with the figures and reassessed their optimism around the possibility of slowing inflation. The market will get more Fedspeak to digest when Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard speak Tuesday. Ed Yardeni of Yardeni Research said that in his view, the Oct. 12 low was the bottom and the S&P 500 could rise to near 4,300 by the end of the year, he told CNBC on “Closing Bell: Overtime” Friday night. The benchmark index currently sits at 3,965.34. “What’s making the big difference in the market is the resilience of the economy, it’s been spectacular,” he said. “Everyone’s been debating whether we’re going to have a soft landing or a hard landing – meanwhile, there’s no landing whatsoever. The consumer didn’t get the recession memo and they keep spending.” Retail sales increased in October, but at the corporate level Target reported slowing demand and Amazon announced it will lay off 10,000 employees — although Home Depot and Walmart have reported strong results. “Despite what holiday season spending may suggest, retail stocks tend to be in the top three for November, but in the bottom three for December, and somewhere middle-of-the-pack in January,” Liz Young, SoFi’s chief investment strategist, said in a note this weekend. “Seasonality has a place in market analysis and has some predictive power. But the power of the economic cycle is stronger, no matter the time of year,” she added. “With 375 basis points of Fed rate hikes so far, an inverted yield curve, spikes in inflation, and commodity prices still a part of the narrative, we can all but conclude that we are late in the economic cycle.” This week, a short one due to the Thanksgiving holiday, investors will be busy with another group of retail earnings. Best Buy, Nordstrom, Dick’s Sporting Goods and Dollar Tree are among the companies on deck. Shares in the Asia-Pacific mostly fell on Monday amid growing Covid concerns in China as its central bank kept the benchmark lending rates, or loan prime rates, on hold — in line with expectations. The Hang Seng index in Hong Kong fell 2.02% in its final hour of trade, leading losses in the wider region. In mainland China, the Shanghai Composite fell 0.39% to 3,085.04 and the Shenzhen Component also fell 0.411% to 11,134.47. In Australia, the S&P/ASX 200 was 0.17% lower at 7,139.30. South Korea’s Kospi dropped 1.02% to 2,419.50. The Nikkei 225 in Japan bucked the regional trend and was up 0.16% at 27,944.79 at the close, while the Topix gained 0.28% to 1,972.57. Oil prices dropped to trade near two-month lows on Monday, having earlier slid by around $1 a barrel, as supply fears receded while concerns over fuel demand from China and U.S. dollar strength weighed on prices. Brent crude futures for January had slipped 54 cents, or 0.7%, to $87.05 a barrel. U.S. West Texas Intermediate (WTI) crude futures for December were at $79.70 a barrel, down 38 cents or 0.5%, ahead of the contract’s expiry later on Monday. The more active January contract was down 0.5% to $79.69 a barrel. Both benchmarks closed Friday at their lowest since Sept. 27, extending losses for a second week, with Brent down 9% and WTI 10% lower. Gold prices fell for a fourth straight session on Monday due to a stronger dollar, with the U.S. Federal Reserve’s monetary policy stance clouding the outlook for non-yielding bullion. Spot gold was down 0.5% to $1,740.68 per ounce, after earlier hitting its lowest level since Nov. 10 at $1,738.35. U.S. gold futures shed 0.7% to $1,742.10. A key driver of the gold price is U.S. real interest rates and the metal is taking cues from higher nominal rates ahead, as well as a stronger dollar, said UBS analyst Giovanni Staunovo. Bullion fell 1.2% last week, its worst since the one ending Oct. 14. The dollar rose 0.8%, making greenback-priced bullion more expensive for overseas buyers.