Chain stores' November sales should provide a close up look Thursday not only at early holiday shopping, but also at how Super Storm Sandy is impacting consumers.
Despite a good start to the holiday shopping season, Thomson Reuters expects sluggish gains of 1.6 percent from the chain stores it follows, and 3.3 percent if drugstores are not counted. The data compares to last November's 3.5 percent gain and does not include cyber Monday results, which will show up next month.
The best performers are expected to be discount stores, up 3.7 percent, according to Thomson Reuters. Apparel stores are expected to show a 3.2 percent gain, and department stores, just 2.1 percent.
Warehouse chain Costco reported a day early, saying its November sales rose 6 percent. Costco was also one of dozens of companies to announce a special dividend this quarter ahead of potential dividend tax rate changes, and it is granting what appears to be the largest yet at $7 per share.
Other store chains are expected to report their monthly sales throughout Thursday morning. Besides chain stores, markets will get a second look at third quarter GDP, expected to be revised up to 2.8 percent from 2 percent.
(Read More: Holiday Spending Frenzy Sparks 'Giving Tuesday')
"It could even go to three (percent) from what we've gotten on trade, inventories and retail," said James Paulsen, chief investment strategist at Wells Capital Management. As for chain store sales, "you could start to see the impact of Sandy, and we're going to start to get hit with that full blast (in other data), but at the same time early reports are that the shopping season is pretty good," he said.
Paulsen expects the impact of Sandy also to show up in the November employment report next week, and also again in weekly jobless claims. Claims are expected to be elevated for a third week, at 395,000. They are reported at 8:30 a.m., as is GDP. Pending home sales for October are reported at 10 a.m.
The most important headlines, however, will once more be what is happening around the "fiscal cliff" talks in Washington. Stocks Wednesday reacted to every nuance in the negotiations dance and ended the day with strong gains.
On Thursday, Treasury Secretary Tim Geithner meets with congressional leaders to continue discussions on the fiscal cliff, which is the $500 billion in expiring tax breaks and automatic spending cuts that start Jan. 1 if Congress does not act.
(Read More: CNBC's Full Coverage of the Fisca Cliff)
Stocks were higher heading into the close Wednesday, after House Majority Speaker John Boehner and President Barack Obama each made positive comments about efforts to reach a deal. But stocks got an extra boost late in the session, after the Wall Street Journal reported that the Fed is expected to continue asset purchases when its Operation Twist ends in December. Some traders said they were surprised the market reacted as much as it did, since it is a widely held view that the Fed will continue its purchase programs.
Birinyi Associates points out that there have been 17 similar positive market reversals since March, 2009, where the S&P was down by 75 basis points at the low, then closed higher by 75 basis points. The last was Oct. 18, 2011 after news of a French and German agreement to boost the European rescue fund. The day after that move, the market declined 1 percent, and it has more often than not been lower on the day after those 17 reversals. Fifty-nine percent of the time, the S&P declined from the open to the close the next day, with an average loss of 0.11 percent. Sixty-five percent of the time it sold off from noon into the close.
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