Strong consumer confidence data delivered a fleeting boost
Wall Street may be getting coal for Christmas. The last week before the holiday left much to be desired, with the three major benchmarks marking a fourth-straight daily loss on Monday, before the Bank of Japan (BoJ) decided to widen its cap on the 10-year Japanese government bond yield. Nevertheless, stocks snapped this losing streak, and surged amid upbeat earnings from retail giant Nike (NKE), as well as strong consumer confidence data for December.
That rally didn’t last, with stocks quickly resuming their December selloff. The Dow Jones Industrial Average (DJI) was off over 650 points at its Thursday lows, the Nasdaq Composite Index (IXIC) shed triple digits, and the S&P 500 Index (SPX) saw its second-worst day this month. A hotter-than-expected core personal consumption expenditures (PCE) price index for November didn’t help matters much, but the DJI was still eyeing a modest weekly win at the time of this writing, while the SPX and IXIC were looking to extend weekly losses.
Top Retail Sector Headlines
Options bears jumpstarted the week by targeting CarMax (KMX) ahead of its third-quarter earnings report, which missed analysts’ expectations. Meanwhile, Stitch Fix (SFIX) slipped to a record low after a downgrade from J.P. Morgan Securities. Kohl’s (KSS) also struggled, but a flashing historically bullish signal may bring the security a much-needed Santa Claus rally. Speaking of rallies, NKE surged thanks to its fiscal second-quarter earnings win and raised forecast. We also checked in on Walgreens Boots Alliance (WBA), which will deliver the first blue-chip earnings report of 2023.
What Analysts Had to Say
Goldman Sachs is confident in the solar sector, naming SolarEdge Technologies as one of its top picks for 2023. Meanwhile, Warner Music Group (WMG) notched an upgrade at Atlantic Equities, which noted the security can deliver “sustainable growth.” FedEx (FDX) drew a round of bear notes, on the other hand, after its mixed quarterly report. Starbucks (SBUX) drew negative analyst attention as well, with Jefferies now rating the coffee stock a “hold.” Lastly, Micron Technology’s (MU) dismal forecast attracted price-target cuts.
Holiday-Shortened Week Ahead
Next week will be shorter, with markets closed Monday in observance of Christmas. Nevertheless, traders will have the S&P Case-Shiller U.S. home price index, as well as the Chicago purchasing managers’ index (PMI) to unpack, in addition to weekly jobless data, the goods trade balance, and retail inventories. The earnings docket is quiet, with only Cal-Maine Foods (CALM) set to report. In the meantime, take a look into what the December 2018 selloff could tell us, and don’t sleep on these Nasdaq-100 Index (NDX) rejects.
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