Inflation and retail sales data greet a roaring stock market rally: What to know this week

Josh Schafer · Reporter
Updated 7 min read

In This Article:

Stocks just had their best week of 2024.

All three major indexes pressed to record highs after Donald Trump won the 2024 presidential election.

For the week, the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) rose more than 4.5%, while the Nasdaq Composite (^IXIC) rose nearly 6%.

In the week ahead, a fresh reading on inflation and retail sales will lead the economic calendar.

In corporate news, quarterly results from Home Depot (HD), Cisco (CSCO), and Disney (DIS) will highlight another week of earnings reports.

Price check

In a widely anticipated move, the Federal Reserve cut interest rates by 25 basis points last Thursday. In a press conference following the announcement, Fed Chair Jerome Powell declined to comment on the central bank's plans for future rate cuts.

"We don’t think it’s a good time to be doing a lot of forward guidance," Powell said. He later noted that Fed officials will need to gauge the economic data released between now and December before knowing if the central bank will cut interest rates again this year.

The first data the Fed will consider ahead of its next meeting will come out on Wednesday with the release of the October Consumer Price Index (CPI). Wall Street economists expect headline inflation rose just 2.6% annually in October, an increase from the 2.4% rise in September. Prices are set to rise 0.2% on a month-over-month basis, per economist projections, in line with the increase seen in September.

On a "core" basis, which strips out food and energy prices, CPI is forecast to have risen 3.3% over last year in October, unchanged from September's increase. Monthly core price increases are expected to clock in at 0.3%, also in line with the September gain.

"The October CPI report will likely support the notion that the last mile of inflation's journey back to target will be the hardest," Wells Fargo's economics team led by Jay Bryson wrote in a weekly note to clients on Friday.

Retail reading

The final monthly retail sales report before the start of the holiday shopping season is set for release on Thursday. Economists estimate retail sales increased 0.3% over the prior month during October. The control group of retail sales — which excludes several volatile categories like gasoline and feeds directly into gross domestic product (GDP) — is also expected to have risen by 0.3%.

Entering the release, several trackers point to the fourth quarter being off to a solid start for economic growth. The Atlanta Fed GDPNow tracker currently projects the US economy growing at 2.5%.

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