The cooler-than-expected October CPI report sent markets soaring this past week and has driven expectations for an end-of-year rally into overdrive. However, an end-of-year rally is not a done deal.
For this week, all eyes will be on the retail sector with big reports due out from Home Depot (
HD
), Lowe's (
LOW
), Walmart (
WMT
), Target (
TGT
), and Macy's (
M
). The retailers step up to the earnings plate with investors looking for signs of the health of the U.S. consumers and just how promotional the holiday season may be with inventory an issue. Economic reports due out include a broad update on October retail sales and a read on producer prices. On the geopolitical front, President Biden will meet Chinese leader Xi Jinping on the sidelines of the G20 Summit. White House officials said the talks will cover a range of regional and global issues. Some of those discussions could have stock market implications even if no formal agreements are made. On the corporate calendar, General Motors (
GM
) and Procter & Gamble (
PG
) will hold investors events that analysts have circled as potential share price catalysts. From tech side of analysis, as what I draw on my chart, I think Market is a little bit "over act" on softer-than-expected US CPI figures its already extended from 8&21 EMAs and reached prior daily basis short resistance. Therefore, instead of saying something horrible or suffer from imaginary fears. I would like to be careful, and wait for correction. You know what, market will do whatever it "wants" to do, rewarding lavishly those who surrender to it, yield to it, and follow it, and punishing severely those who argue with it, fight it, and go against it.
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With the Treasury market closed Friday for Veterans Day, cryptocurrencies selling off again after FTX Group filed for Chapter 11 bankruptcy, and the sheer magnitude of yesterday's advance, the stock market had ample reason to ease back on Friday and give in to some profit-taking pressure. It didn't do that, however. Granted there were some pockets of weakness, but overall, the market not only held Thursday's gains but added to them.In brief, it was an impressive display of resilience that was fortified by leadership from the mega-cap stocks, continued rebound action in the growth stocks, further weakness in the dollar, and some hopeful news that China is relaxing its quarantine guidelines for inbound travelers. The latter was seen as a first step toward China extricating itself from its economically damaging zero-COVID policy. Chinese officials might not admit as much, but nonetheless, market participants liked the thought of it just as they liked the thought that inflation has peaked and that the Fed will soon take a less aggressive rate-hike approach.