Harding and Company – What to Watch in the Markets This Week

MANHATTAN, N.Y. - Nov. 19, 2018 - PRLog -- Stocks had a volatile week. The S&P 500 broke a five-day losing streak on Thursday and closed 0.22%, or 6.07 points higher as of market close on Friday. The Dow jumped 0.49%, or 123.95 points, while the Nasdaq fell 0.15%, or 11.16 points.

Crude oil was put to the test, but the commodity ultimately snapped its longest losing streak in history on Wednesday and closed higher for the third straight day on Friday. Nevertheless, oil was still down 6% at the end of the week. The commodity's recent roller coaster ride could pose a real threat, according to Barclays. "A rise in oil prices could both cut into real household income and hurt corporate earnings through a reduction in profitability,".

Earnings Calendar

After a busy week of retail earnings, the last group of retail stocks will report earnings on Tuesday before the holiday. Lest we forget, Friday is retail's "Black Friday."

Monday: JD.com before market open; L Brands and Jack in the Box after market close
Tuesday: Hormel Foods, Campbell Soup before market open; Lowe's, Target, Best Buy, Kohl's, Ross Stores, T.J. Maxx, Foot Locker and Gap after market close
Wednesday: Deere before market open
Thursday: Thanksgiving Day – markets will be closed
Friday: Half market day – close at 1 p.m. ET

Economic Calendar

The bulk of economic data next week will be released on Tuesday and Wednesday.

Tuesday, housing starts for the month of October as well as building permits for October are expected to increase from the prior month. H&C does not expect there to have been a meaningful increase to starts. "Higher mortgage rates and steadily rising home prices have significantly reduced affordability. Rising input costs have made it more difficult to build homes at lower price points, where demand is strongest, and labor costs continue to rise amid a shortage of skilled construction workers," Andrew Solomon said in a note to clients on Friday.

Nomura echoed the negative outlook for housing starts. "Considering structural challenges, it remains unclear if housing starts will recover materially in Q4 after slowing in previous two quarters."

Furthermore, existing home sales data will be released on Wednesday. H&C remains pessimistic about the housing market. "We suspect the housing market will continue to cool in coming months, as virtually every leading indicator of housing has continued to weaken. While we expect to see less typical seasonal weakness over the winter months, we expect the overall sales to remain anemic."

Monday: NAHB housing market index, November (68 expected; 68 prior)
Tuesday: Housing starts, October (1.230 million expected; 1.201 prior); housing starts month-on-month, October (+2.4% expected; -5.35 prior); building permits, October (1.26 million expected; 1.27 million prior revised); building permits month-on-month, October (-0.8% expected; +1.7% prior revised)
Wednesday: MBA mortgage applications, week ending in November 16 (-3.2% prior); durable goods orders, October (-2.2% expected; +0.7% prior); initial jobless claims, week ending November 17 (215,000 expected; 216,000 prior); continuing claims, week ending November 10 (1.650 million expected; 1.676 prior); existing home sales, October (5.20 million expected; 5.15 million prior); existing home sales month-on-month, October (+1.0% expected; -3.4% prior); University of Michigan sentiment index, November (98.3 expected; 98.3 prior)
Thursday: Thanksgiving Day – Markets will be closed
Friday: Half market day – close at 1 p.m. ET

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