The Week Ahead on Wall Street

Economic News

Today, the Leading Economic Indicators for November are released. This is an index that measures US business cycles on a monthly basis. In October the Leading Economic Index increased 0.9% month-over-month. That was in line with economists’ forecasts and signaled the economy should expand for the remainder of the year.

Tomorrow, be on the lookout for the US Bureau of Economic Analysis to release the current account deficit for the third quarter. In the second quarter the deficit expanded by 0.5% to $190.3 billion. The deficit hasn’t been this high since the second quarter of 2007.

Wednesday, the Consumer Confidence Index for December is released. This is an important data point as it gauges consumers’ feelings about their finances and willingness to spend. In November consumer confidence fell after rebounding in October. With the Omicron variant rapidly spreading, all eyes will be on this data point to gauge consumer sentiment heading into the end of the year.

On Thursday, initial and existing unemployment claims for the week earlier are released. Jobless claims have been steadily declining as people return to work again. After hitting a low not seen since 1969, initial unemployment claims unexpectedly rose last week. Real consumer spending and core inflation for November will also be released along with the final UMich consumer sentiment index for December. Along with the consumer confidence report on Wednesday, these gauges will paint a robust picture of how Americans are feeling as both prices and coronavirus cases are rising heading into the end of the year.

Earnings

Today, Carnival (CCL) reports quarterly earnings. The cruise line operator credits strict COVID-19 safety rules for the limited number of outbreaks since it began sailing out of the US again. Even though the majority of passengers and employees are vaccinated, it’s not clear yet what impact Omicron is having. That’s something investors will be paying close attention to when Carnival reports its latest results.

Tomorrow, be on the lookout for earnings from drugstore operator Rite Aid (RAD). Rite Aid is sitting on a lot of debt — more than $8.8 billion as of August — which has weighed on the stock. The drugstore operator’s plan to reduce that debt will be something to watch out for.

Also Tuesday, General Mills (GIS) reports quarterly earnings. The maker of cereal, snacks, and other consumer foods warned retailers it will raise prices in 2022 in the wake of soaring inflation. In some cases prices could increase 20%. Whether consumers can afford the increases remains to be seen.

On Wednesday, CarMax (KMX) reports quarterly earnings. The vehicle dealer has benefited from surging prices and record demand for used vehicles. JPMorgan raised its investment rating on the stock earlier this month to overweight from neutral owing to the company’s strong position over rivals. The Wall Street firm thinks CarMax is handling labor and vehicle shortages better than peers.

Also Wednesday, Paychex (PAYX) reports quarterly earnings. The payroll company has benefited during the pandemic with more companies moving business processes online. The stock has surged as a result. With shares outpacing earnings growth it’s not clear for how much longer the stock will rally.

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