Here are 3 things to watch in the stock market after a very difficult week

Published Sat, Oct 14 202310:01 AM EDT

It was a mixed week for the major stock benchmarks. The S & P 500 closed lower Friday, but turned in a weekly gain despite big swings in oil prices on geopolitical tensions and hotter-than-expected inflation data. The Nasdaq 's more than 1% drop Friday, however, wiped out its weekly gains for a small decline. The Dow , which rose slightly Friday, finished up for the week. With the bond market closed last Monday for Columbus Day, the Dow, S & P 500 and Nasdaq were able to mount a huge turnaround and close higher. They sank earlier in the session on concerns about the Israel-Hamas war and spiking oil prices. West Texas Intermediate crude, the U.S. standard, settled 3.7% higher. Bond yields were at bay Tuesday and Wednesday and stocks were able to add to their gains. Oil fell slightly on Tuesday and dropped nearly 3% on Wednesday. On Thursday , stocks closed lower, as bond yields spiked on stronger September consumer prices, snapping a four-session winning streak. Oil was down a bit. Stocks finished mixed Friday after consumer sentiment data slumped in October and inflation expectations spiked. Oil surged Friday, rising more than 5.8% . For the week, WTI gained nearly 6%, the biggest weekly advance in more than a month. Next week includes several Federal Reserve speakers, important economic numbers, and two more earnings reports from Club stocks. 1. Week of Fed speak. It's going to be an incredibly busy week of watching Fed speeches for clues on whether central bankers hike interest rates one more time this year, as they indicated after their September meeting. Every day has a Fed official making an appearance, with Fed Chairman Jerome Powell's event on Thursday at noon ET the biggest. There's also a plethora Federal Open Market Committee (FOMC) voting members out and about next week. Philadelphia Fed President Patrick Harker and New York Fed President John Williams both have speeches scheduled Monday, Tuesday and Wednesday. Harker also speaks on Thursday and Friday. FOMC voting members Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan both have appearances set for Thursday after Powell. This past Friday , Harker said he advocates leaving rates where they are, "absent a stark turn in what I see in the data and hear from contacts." On Wednesday , Fed Gov. Christopher Waller said central bankers should "wait and see" another rate increase is needed. On Monday , Fed Vice Chair Philip Jefferson said he and his colleagues should "proceed carefully." Both Waller and Jefferson are FOMC voting members. All three last week indicated that the tightening in financial conditions may negate the need for further hikes. The Fed's next final two policymaking meetings of the year are Oct. 31-Nov. 1 and then Dec. 12-13. The CME FedWatch tool puts 90% odds on the central bank hold rates steady at 5.25%-5.5% on Nov. 1 and it's about 70% hold and 30% hike by 25 basis points for Dec. 13. 2. Data to depend on. The clear message from central bankers and Powell has always been that they will be data-dependent when making decisions on monetary policy. With two hotter-than-expected September inflation reports in the rear-view mirror, the Fed and Wall Street will turn to next week's economic data. The government's retail sales report Tuesday will provide signals on how Americans were feeling about their money last month as price pressures remained sticky. Remember, consumer spending accounts for about two-thirds of the American economy. August retail sales held up as inflation that month slowed. On the manufacturing side, which accounts for about 12% of U.S. gross domestic product, the Fed releases also releases September industrial production and capacity utilization figures on Tuesday. These numbers might be able to tell us the impact of the ongoing United Auto Workers strike against Detroit's big three automakers: General Motors (GM), Chrysler-parent Stellantis (STLA) and Club name Ford (F). It's all about real estate to end the week, with the government's September housing starts and building permits out Wednesday and the National Association of Realtors' September look at existing home sales. We're going to look at those numbers to see if there are any changes in the tight supply of existing homes and new construction, which is boosting prices despite high mortgage rates. 3. Earnings season. The pace of quarterly earnings picks up next week, and we're getting results from two Club names – Morgan Stanley (MS) and Procter & Gamble – before the opening bell Wednesday. MS YTD mountain Morgan Stanley YTD We certainly hope Morgan Stanley's numbers are as good as Friday's report from our other bank holding Wells Fargo (WFC). Jim Cramer said Friday that banks are making lots of money and he hopes investors realize that these are good investments. Morgan Stanley is expected to grow revenue by more than 2% year over year to $13.2 billion in the third quarter. Earnings-per-share (EPS) are seen lower than last year at $1.28. Efforts to lean more on asset and wealth management and less on investment banking should help results. While there's been a pickup in initial public offerings and mergers and acquisition activity, neither are anywhere near as robust as they need to be. During a recent conference, Morgan Stanley executives said that capital markets will likely improve in 2024. Shares of Morgan Stanley have struggled this year, dropping more than 8% compared to the S & P 500's nearly 13% advance in 2023. Its declines, however, have been more resilient than the 24% decline in the KBW Bank Index . The banking sector has been weighed down since the March collapse of Silicon Valley Bank touched off a confidence crisis in the industry. PG YTD mountain Procter & Gamble YTD As for Procter & Gamble, shares have also lagged in 2023, dropping more than 4.5%. However, the stock has held up better than the roughly 9% decline in the S & P 500 consumer staples sector . P & G may not be the best stock in boom times. But there's enough concern about a recession out there that the stock should be able to move higher if the bond market settles down. In its fiscal 2024 first quarter, P & G is expected to report a nearly 5% increase in revenue to $21.6 billion. Earnings are seen higher than last year at $1.57 per share. Many consumer staple companies that sell food have been hit lately on worries about the business impact from those new GLP-1 weight-loss/diabetes drugs. Jim noted during the Club's October Monthly Meeting that P & G's portfolio of grooming, cleaning and personal health products shouldn't be affected. Here's the full rundown of all the important domestic data in the week ahead as we consider our next moves for the portfolio after making no trades this past week. We do, however, plan to exit Pioneer Natural Resources (PXD) as soon as our trading rules allow after Exxon Mobil 's (XOM) acquisition offer. When that happens, we'll be left with one energy stock, Coterra Energy (CTRA), which is about 50/50 oil and natural gas . Monday, Oct. 16 Earnings before the bell: Charles Schwab (SCHW) Tuesday, Oct. 17 Before the bell: Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ) 8:30 a.m. ET: Retail sales (September) 9:15 a.m. ET: Industrial production & capacity utilization (September) After the bell: United Airlines (UAL) Wednesday, Oct. 18 Before the bell: Procter & Gamble (PG), Morgan Stanley (MS), Travelers (TRV) 8:30 a.m. ET: Housing starts & building permits (September) After the bell: Tesla (TSLA), Netflix (NFLX), Alcoa (AA) Thursday, Oct. 19 Before the bell: AT & T (T), American Airlines (AAL), Taiwan Semiconductor Manufacturing Company (TSM), Blackstone (BX) U nion Pacific (UNP) Philip Morris (PM), Alaska Air (ALK) 8:30 a.m. ET: Weekly jobless claims (week ending Oct. 14) 8:30 a.m. ET: Philadelphia Fed index (October) 10 a.m. ET: Existing home sales (September) 10 a.m. ET: Leading indicators (September) After the bell: CSX (CSX), Intuitive Surgical (ISRG) Friday, Oct. 20 Before the bell: American Express (AXP), SLB (SLB) — CNBC's Zev Fima contributed to this report. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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