Stock 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 76 points, or 0.23%. S&P 500 and Nasdaq 100 futures slid 0.55% and 0.78%, 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.