The Market Week Ahead: Dec. 2 – Dec. 6

Monday, December 2, 2019 4:03 PM | Bobby Raines

Dec. 2, 2019 - This week looks like it is going to be about trade. Before the bell this morning, President Trump said he was reinstating tariffs on steel and aluminum from Argentina and Brazil and then later in the day, several administration officials said that tariffs set to go into effect on Dec. 15 will be imposed unless there is a deal with China.

A deal with China seems as unlikely as ever as the two sides remain pretty far apart on all of the substantive issues. It is still possible that Trump could delay the imposition of tariffs on Dec. 15. That probably becomes more likely the worse the stock market performs as we approach that date.

The steel and aluminum tariffs are, according to Trump, because Argentina and Brazil have both devalued their currencies. Brazil took action last week to try to keep its currency higher, while the interest rate in Argentina, where the currency fell after recent election results is already above 60%. It is true the currencies are weak, but not true that either currency was devalued on purpose. Argentina and Brazil have been beneficiaries of China's limits on imports of U.S. agricultural goods, so it is possible Trump is trying to discourage other countries from making new trade relationships with China.

Trade seems likely to be the driving force in markets for as long as the administration wants to keep it there. The economy still seems to be relatively strong, but trade is a major headwind for corporate profits, so as long as those issues remain unresolved and escalating, we're going to see continued volatility.

 

Economic Events this Week

Those monthly employment numbers are the heaviest hitter on this list, but it's going to take a pretty big surprise to move markets.

  •  Wednesday
    • 8:15 a.m. - ADP Employment Change
    • 10:00 a.m. - ISM Non-Manufacturing Index
    • 10:30 a.m. - EIA Crude Oil Inventories
  • Thursday
    • 8:30 a.m. - Trade Balance
    • 10:00 a.m. - Factory Orders
  • Friday
    • 8:30 a.m. - Nonfarm Payrolls
    • 8:30 a.m. - Avg. Hourly Earnings
    • 8:30 a.m. - Unemployment Rate
    • 10:00 a.m. - Univ. of Michigan Consumer Sentiment - Preliminary for Dec.
    • 10:00 a.m. - Wholesale Inventories
    • 3:00 p.m.  - Consumer Credit

Earnings Reports this Week

Not the busiest week, but there's quite a few specialty retail names on this list.

Tuesday:

  • Before the bell: BMO. CONN, LE, NIO
  • After the bell: AVAV, MRVL, CRM, WDAY, ZS
Wednesday:
  • Before the bell: CPB, GII
  • After the bell: HOMe, FIVE, HRB, RH, WORK, SMAR, VRNT
Thursday:
  • Before the bell: BF.B, DG, DLTH, EXPR, KR, MIK, SIG, PLCE, TIF
  • After the bell: AOBC, CLDR, COO, CRWD, DOCU, FIZZ, OKTA, ULTA, ZM
Friday:
  • Before the bell: BIG

Sector and Industry Sentiment

As part of the upgrade and redesigned InvestorsObserver, we are now calculating a proprietary Sentiment Score for stocks. This score looks at price action, volume trends and data from the options market when available to try to get a sense of how the market feels about a stock. We're replacing the lists of sectors and industries that have performed well or poorly over various time periods with a ranking of all eleven sectors in order of sentiment and then the top ten and bottom ten industries.

Sector Sentiment

Real Estate Basic Materials Healthcare Technology Communication Services Financial Services Consumer Defensive Consumer Cyclical Utilities Industrials Energy

Top Industries

Silver Food Distribution Tobacco Financial Conglomerates Gold Electronics & Computer Distribution Marine Shipping Other Precious Metals & Mining Household & Personal Products Copper

Bottom Industries

Coking Coal Auto Manufacturers Medical Distribution Oil & Gas Integrated Banks - Diversified Lumber & Wood Production Industrial Distribution Health Care Plans Farm & Heavy Construction Machinery Railroads

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