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The upcoming week poses a significant challenge for stock market enthusiasts as attention turns to key economic data, with the release of the Personal Consumption Expenditures (PCE) index for October being the focal point. Investors are eager to gauge the impact of inflation, especially as the Federal Reserve’s preferred gauge, “core” PCE inflation, is expected to have risen by 3.5% annually.
Apart from the inflation data, the economic calendar includes updates on manufacturing activity, consumer confidence, and home prices. Additionally, several major companies are set to release quarterly reports, providing insights into the health of the consumer, software demand, and the influence of AI on business strategies.
Notable corporate earnings expected include reports from Salesforce (CRM), Snowflake (SNOW), Okta (OKTA), Dollar Tree (DLTR), Foot Locker (FL), Kroger (KR), and Ulta Beauty (ULTA). These reports will be closely scrutinized for forecasts related to the holiday season and assessments of how economic factors like elevated interest rates and labor market conditions are influencing consumer behavior.
In terms of the broader market outlook, recent economic data aligns with the narrative of a potential “soft landing” for the US economy, easing concerns of a severe economic downturn. However, the focus remains on the Thursday inflation reading, offering a final opportunity for economic data to impact the prevailing narrative.
The economic week kicks off with updates on Dallas Fed Manufacturing Activity and new home sales on Monday. Key data points throughout the week include Conference Board Consumer Confidence, S&P CoreLogic Case-Shiller home price indices, and GDP estimates.
On the corporate side, attention will be on Salesforce’s guidance for the current quarter, shedding light on customer decisions for renewals and add-ons. Analysts are particularly interested in how companies are responding to price increases and the demand for Salesforce’s AI products.
In summary, the week ahead promises to be crucial for assessing the stock market’s resilience, with a focus on economic indicators and corporate earnings shaping the market narrative.
