Fed comments this week alternated between dovish and hawkish
It was a data-heavy week for Wall Street, which gave investors mixed signals. The central bank's next move was also in focus, with U.S. Federal Reserve Vice Chair Lael Brainard hinting at slowing rate hikes. A lighter-than-expected producer price index (PPI) reading for October also helped inject some additional optimism into the market; however, stocks struggled to maintain those gains after a disappointing earnings report from Target (TGT). A lukewarm import price index and another contraction in the National Association of Home Builders' (NAHB) monthly confidence index dinged sentiment as well.
Though there was some optimism that the Fed could dial December's rate hike down to 50-basis points,these hopes were quickly dashed by Thursday's hawkish comments from St. Louis Fed President James Bullard, who noted rates hikes have had "only limited effects" on inflation so far. Boston Fed President Susan Collins echoed this sentiment, noting "there is more work to do." At the time of this writing, all three major indexes were still eyeing weekly losses, despite surging thanks to strong retail earnings.
Retail Stocks in the News
Target's earnings drama put retail stocks in the spotlight this week, but there were a few other names making headlines of their own. Advance Auto Parts (AAP) also bungled in the earnings confessional, while home improvement concern Lowe's (LOW) reported a top- and bottom-line beat. Macy's (M) raised its full-year forecast after sharing upbeat earnings and revenue, while Kohl's (KSS) withdrew its annual sales and profit outlook, citing macroeconomic headwinds.
In other news, Estee Lauder (EL) was looking to buy luxury fashion brand Tom Ford in a deal worth $.28 billion. Meanwhile, Ralph Lauren (RL) elected Wei Zhang to its board of directors, bringing it up to 13 members. Lastly, Foot Locker (FL) was eyeing its best day since August amid a rise in comparable store sales, and Five Below (FIVE) was looking to stage a bounce.
Checking in With the Chip Sector
It was a busy week for the semiconductor sector as well. Advanced Micro Devices (AMD) received bull notes from Baird and UBS, with both firms citing positive industry cyclical trends and strong demand for the company's Genoa chip. It wasn't all a bed of roses for the chip space, though. Micron Technology (MU) warned it would slash its memory chip supply in 2023, due to slowing demand. The news sank Nvidia (NVDA) just ahead of its third-quarter earnings report. The firm's revenue topped estimates, though earnings missed the mark.
More Retail Earnings Out Ahead of Black Friday
Though next week will be short due to Thanksgiving, there will be plenty of earnings due out, including reports from key retailers just ahead of Black Friday. Notable names on the docket include Abercrombie & Fitch (ANF), American Eagle (AEO), Best Buy (BBY), Burlington Stores (BURL), Dick's Sporting Goods (DKS), Dollar Tree (DLTR) Nordstrom (JWN), Urban Outfitters (URBN), and Zoom Video Communications (ZM). Here's some more insight into how stocks might perform during Thanksgiving week, and what the latest Fed funds rate and consumer price index (CPI) reading could mean.