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Stocks Mixed Monday Ahead of Inflation, Spending, Sentiment Reports this Week

Monday, November 22, 2021 04:54 PM | Nick Dey

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Stocks Mixed Monday Ahead of Inflation, Spending, Sentiment Reports this Week

Stocks were mixed Monday ahead of a shortened Thanksgiving week.

In a year that has been full of mergers and acquisitions, there were a few extra this morning. Vonage (VG) soared on news that it would be acquired by Ericsson (ERIC) for $21 per share, while Monster (MNST) advanced 1.21% and Constellation Brands (STZ) declined 0.45% after Bloomberg reported that the pair could be exploring a merger.

Existing Home Sales unexpectedly rose in October, upn0.8% to an annualized adjusted rate of 6.34 million homes from September’s reading of 6.29 million homes. This is a 5.8% decrease from a year ago as total housing inventory remains low, prices continue to rise, and demand remains strong.

Looking ahead this week, investors are going to be strapped in Wednesday as a host of extra-economic data gets released side-by-side as the market is closed Thursday for turkey day. Durable Goods Orders are first up, followed by PCE Prices, Personal Income and Spending, New Home Sales, and Consumer Sentiment before minutes of the most-recent Federal Reserve meeting are released that afternoon.

Inflation, Sentiment, and Spending

PCE Prices, the Fed’s preferred gauge of inflation, is expected to have ticked higher in October. Economists are expecting the headline number to have risen to 0.6%, from 0.3% in September. Meanwhile, core prices are expected to rise 0.4% following a 0.2% rise in September.

This could prove to be an important figure as continued increases in prices could push the Federal Reserve to step in put the brakes on the recovery to try to get inflation under control.

In the preliminary reading for the University of Michigan’s Consumer Sentiment survey, sentiment reached its lowest level in a decade as one-in-four consumers reported inflationary reductions in their standard of living.

The report said that the narrative that inflation was “transient” made it out to consumers that they could “smile and grin through it” and that policy would fix it shortly. Thus, inflation’s persistence has brought on a rising belief that there are “no effective policies” developed to reduce inflation’s reach.

Consumer sentiment is expected to remain in line with the preliminary reading of 66.8 when released Wednesday morning.

As of now, consumers have been willing to spend out of pocket, as shown by the declining savings rate which has dipped from 9.9% in July to 7.5% in September.

Retail sales for the month of October, released last week, showed the positive effects that early holiday shopping had on sales. Personal Spending is expected to tell a similar story when its October numbers are released on Wednesday, with consensus estimates expecting a rise of 1.0% following a 0.6% advance in September.

Economic Events this Week

Tuesday

- 9:45 a.m. - IHS Markit Manufacturing PMI - Preliminary

- 9:45 a.m. - IHS Markit Services PMI - Preliminary

Wednesday

- 10:30 a.m.- EIA Crude Oil Inventories

Thursday

- 8:30 a.m. - Initial & Continuing Claims

- 8:30 a.m. - Durable Goods & Durable Orders

- 10:00 a.m. - New Home Sales

- 10:00 a.m. - PCE Prices

- 10:00 a.m. - Personal Spending & Personal Income

- 10:00 a.m. - University of Michigan Consumer Sentiment - Final Reading

- 2:00 p.m. - FOMC Minutes

Earnings Reports this Week

Tuesday:

Before the bell:

BBY, MDT, DLTR, DKS, ADI, BURL, SJM, AEO

After the bell:

DELL, HPQ, GPS, JWN, VMW, ADSK

Wednesday:

Before the bell:

DE, KC

Sector and Industry Sentiment

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