Week Ahead on Wall Street: Giving Thanks
By: Mario Ismailanji · November 25, 2024 · Reading Time: 4 minutes
Gratitude for High Returns
As we gather with family and friends this Thanksgiving, there’s much to be thankful for in the world of investing. Markets have been kind in 2024, with returns exceeding many investors’ optimistic expectations: Despite starting the year below 5,000 points, the S&P 500 briefly surpassed 6,000 points earlier this month. Year to date, the index is up some 25% at the time of writing.
Still, as we celebrate these gains, it’s important to be clear-eyed about the future: Stellar market performance year after year is not the norm. History shows us that periods of exceptional returns tend to be followed by more muted returns (or even pullbacks). This is sometimes referred to as mean reversion.
Historical data can provide valuable perspective (though past performance doesn’t guarantee future results): Over the past two years, the S&P 500 has returned 58% (assuming dividend reinvestment). In past situations where two-year returns were as high as that, forward returns have typically been more moderate, as the chart below shows.
This doesn’t necessarily mean tough times are coming – forward returns are still positive – but it does mean a balanced approach can pay off. Diversifying, strategic planning, and managing expectations are key to investing for the long-term. Prudent investors will use this time to reassess, rebalance, and prepare their portfolios for whatever markets might throw at them next year.
Economic and Earnings Calendar
Monday
• October Federal Reserve Bank of Chicago National Activity Index: This is a monthly index put together that incorporates 85 indicators from four categories: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories.
• November Dallas Fed Manufacturing Activity: This is the Dallas Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• Earnings: Agilent Technologies
Tuesday
• November Philadelphia Fed Non-Manufacturing Activity: The Philadelphia Fed’s survey of services executives in the region on business conditions and their outlook.
• September FHFA House Price Index: This is a broad measure of single-family house prices released by the Federal Housing Finance Agency.
• September S&P CoreLogic Case-Shiller Home Price Index: This is a private sector measure of national home prices. After a period of slight decline in the second half of 2022 and early 2023, the index returned to growth and is now at record highs.
• October New Home Sales: While only a minority of home transactions in any given month come from new constructions, these home prices tend to be more cyclical and give insight into developing trends.
• November Conference Board Consumer Confidence: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on job availability and the state of the labor market.
• November Richmond Fed Manufacturing Activity: The Richmond Fed’s survey of manufacturing executives in the region on business conditions and their outlook.
• November Richmond Fed Non-Manufacturing Activity: The Richmond Fed’s survey of services executives in the region on business conditions and their outlook.
• November Dallas Fed Non-Manufacturing Activity: This is the Dallas Fed’s survey of services executives in the region on business conditions and their outlook.
• FOMC Meeting Minutes: The Federal Reserve releases detailed notes of every FOMC meeting three weeks after their conclusion. Investors often look for more information on Fed officials’ views for hints on the outlook for interest rates and the economy.
• Earnings: Analog Devices, Autodesk, Best Buy Co, CrowdStrike, Dell Technologies, HP, JM Smucker
Wednesday
• 3Q GDP Second Estimate: The primary measure of economic activity in the United States, which is measured as total expenditure on a country’s goods and services.
• October Wholesale Inventories and Sales: Wholesalers often operate as an intermediary between manufacturers and retailers, serving as a key part of the goods supply chain.
• October Wholesale and Retail Inventories: Wholesalers and retailers often operate as intermediaries for the sale of manufactured products, serving as a key part of the goods supply chain.
• October Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.
• October Personal Income and Spending: These numbers give insight into how Americans are doing, which is important since consumer spending accounts for about two-thirds of economic growth in the United States.
• October Personal Consumption Expenditures Price Index: The Fed targets this inflation measure for its price stability mandate and believes PCE to be the best measure of consumers’ spending habits.
• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.
• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.
Thursday
• Thanksgiving Day. U.S. markets are closed.
Friday
• U.S. markets will close early.
• November Chicago Business Barometer: The barometer provides information on U.S. economic activity and business conditions, consisting of seven activity indicators and three buying policy indicators.
• Earnings: Kroger
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