As we settle in for the holiday with our turkey and pumpkin pie next week, investors have plenty to be thankful for this year.<\/p>\n
This time last year, stocks were still in the gutter, inflation was in the stratosphere and Federal Reserve interest rates were going up, up, up. <\/p>\n
This time it\u2019s different. The S&P 500 has risen 17% since Jan. 1. The much-anticipated recession has yet to arrive. Unemployment remains below 4% even after the most aggressive campaign of interest-rate increases in a generation. And consumers are still spending\u2013Walmart, Target, and Gap all beat expectations this week.<\/p>\n
It helps that the inflation rate has dropped back substantially to around 3%, not too far off the Fed\u2019s 2% target. Walmart CEO Doug McMillon was even talking about deflation in the coming months.<\/p>\n
Oil prices are below $75 a barrel, which should take the edge off the cost of gasoline. Airfares are also significantly cheaper this year than they were for the holidays last year, according to price-tracking website Hopper.<\/p>\n
After the latest inflation data, bond yields are dropping, too, as traders start to price in Fed rate cuts next year. The 10-year yield, which has been the bane of stocks as the Fed promised to keep rates higher for longer, has dropped back to around 4.4% from as high as 5% in October.<\/p>\n
And while the tension between the U.S. and China is an obstacle to global growth, it was positive to hear Chinese leader Xi Jinping say this week that he wants the two countries to be friends.<\/p>\n
Of course, lots of these things could be interpreted as signs the recession may finally be coming. But for now, it\u2019s good to be grateful for what we have.<\/p>\n
\u2014Brian Swint<\/em><\/p>\n *** Join Investor\u2019s Business Daily\u2019s multimedia content editor Alissa Coram and deputy markets editor David Saito-Chung today at noon when they detail how investors can generate outperformance without having to buy and sell stocks a lot. They will talk about how to find these seemingly elusive trades and how to determine which stocks are the ones that deserve your patience. Sign up here. <\/em><\/p>\n Another batch of earnings reports from retailers on Thursday gave a mixed picture of consumer spending and industry projections entering the holiday sales season. What\u2019s Next:<\/strong> \u2014Janet H. Cho<\/em><\/em><\/p>\n Oil prices were on pace for a fourth consecutive week of declines on Friday as demand worries continued to weigh on the market.<\/p>\n What\u2019s Next:<\/strong> The Organization of the Petroleum Exporting Countries and its allies are meeting on Nov. 26. Analysts at UBS said they expect Saudi Arabia and Russia to extend their voluntary output cuts into 2024 but additional cuts can\u2019t be ruled out.<\/p>\n \u2014Adam Clark<\/em><\/em><\/p>\n U.S.-China relations, in the spotlight during this week\u2019s meeting of Presidents Joe Biden and Xi Jinping, is pressuring Chinese technology companies. Hangzhou-based e-commerce company What\u2019s Next:<\/strong> Alibaba said the U.S. chip restrictions may affect its business more generally by hindering its ability to upgrade tech capabilities. U.S. rules are encouraging China\u2019s tech sector to speed research to advance artificial intelligence without relying on the latest American chips, the Journal reported. <\/p>\n \u2014Liz Moyer and Jack Denton<\/em><\/em><\/p>\n \n Amazon.com What\u2019s Next:<\/strong> Other auto makers who sell gas-powered vehicles through a traditional dealer network are also looking at ways to digitize sales. \u2014Janet H. Cho<\/em><\/em><\/em><\/p>\n In the latest labor movement activity, thousands of unionized What\u2019s Next:<\/strong> Starbucks recently announced plans to spend $1 billion on workforce initiatives, the second round of investment since unionization activity began two years ago. It plans to double hourly incomes by 2025 compared with 2020 levels through more hours and higher pay.<\/p>\n \u2014Sabrina Escobar, Catherine Dunn, and Liz Moyer<\/em><\/em><\/p>\n <\/p>\n Do you remember this week\u2019s news? Take our quiz below to test your knowledge. Tell us how you did in an email to thebarronsdaily@barrons.com.<\/em><\/p>\n 1. The October consumer price index bolstered the argument that the Federal Reserve could be near the end of its interest rate increases, coming in cooler than expected from last year and below September\u2019s pace. What was the annual increase?<\/p>\n a. 3.0%<\/p>\n b. 3.2%<\/p>\n c. 3.4%<\/p>\n d. 3.6%<\/p>\n 2. United Auto Workers members at which of the following Big 3 auto makers have ratified their new labor contract as of Thursday, though the margin of victory had some worried it might fail?<\/p>\n a. General Motors<\/p>\n b. Ford Motor<\/p>\n c. Stellantis<\/p>\n d. Tesla<\/p>\n<\/h4>\n
***<\/h4>\n
Retail Earnings Give Mixed Picture of Spending as Holidays Approach<\/h2>\n
\n Gap
\n beat expectations, including a smaller-than-estimated drop in third-quarter same-store sales under new CEO Richard Dickson.<\/p>\n\n
\n also reported better-than-expected third-quarter sales and earnings but adjusted its full-year outlook to reflect an uncertain economic environment<\/strong>. CEO Tony Spring said Macy\u2019s was entering the holiday period \u201cin a healthy inventory position,\u201d with merchandise inventory 6% lower than last year.<\/p>\n<\/li>\n
\n also beat expectations on revenue and comparable sales and raised its Wall Street estimates. But a 4.7% rise in same-store sales<\/strong> was less than last year\u2019s figure. It forecast adjusted earnings per share for full year 2024 of $6.40 to $6.48 a share, slightly below expectations.<\/p>\n<\/li>\n
\n beat earnings and sales estimates, but its guidance disappointed. The soap-and-fragrance retailer expects fourth-quarter net sales and earnings to decline more than expected<\/strong>. It also lowered its full-year net sales and earnings guidance.<\/p>\n<\/li>\n<\/ul>\n
\n Williams-Sonoma
\n beat profit analysts\u2019 expectations but missed on revenue and same-stores sales. The home goods and furniture retailer cut its full-year outlook, expecting revenue to drop 10% to 12% as consumers continue to hesitate spending on high-ticket furniture.<\/p>\n***<\/h4>\n
Oil Headed for Fourth Straight Week of Declines<\/h2>\n
\n
***<\/h4>\n
U.S.-China Relations Trip Up Alibaba\u2019s Cloud Spin Off Plan<\/h2>\n
\n Alibaba
\n has canceled the planned spinoff of its cloud computing arm, underscoring that risk.<\/p>\n\n
\n a Chinese social-media and videogame firm said the U.S. chip curbs would affect its business leasing AI chips<\/strong> through cloud services. It has stockpiled chips, including one by
\n Nvidia,<\/span>
\n The Wall Street Journal reported.<\/p>\n<\/li>\n<\/ul>\n***<\/h4>\n
Amazon.com Adds New Car Sales Starting With Hyundai<\/h2>\n
\n is adding a new category to its e-commerce store: cars. Starting next year, shoppers will be able to buy a new vehicle through its store from a dealer near them, with
\n Hyundai Motor
\n being the first to sell on the platform. It\u2019s another step in the direct consumer sales model developed by
\n Tesla.<\/span>\n <\/p>\n\n
\n Rivian
\n and
\n Lucid
\n followed suit.<\/p>\n<\/li>\n
\n Ford Motor
\n plans to offer EV shoppers more flexible online buying next year, including remote vehicle delivery, The Wall Street Journal reported. <\/p>\n***<\/h4>\n
Starbucks Workers Walk Out on \u2018Red Cup\u2019 Giveaway Day<\/h2>\n
\n Starbucks
\n workers went on strike Thursday, coinciding with the coffee chain\u2019s annual \u201cRed Cup Day\u201d giveaway for the second-straight year. Starbucks Workers United wants the company to come to the table on pay raises, increased staffing, and other issues.<\/p>\n\n
\n General Motors
\n ratified a new contract, and workers at Ford Motor and
\n Stellantis
\n appeared to be close to approval.<\/p>\n<\/li>\n<\/ul>\n***<\/h4>\n