The shortened trading week features earnings from our best stock of the year

Published Sat, Nov 18 202310:13 AM EST

Wall Street powered higher this week — with the bulk of the gains coming Tuesday thanks to a welcome October consumer inflation report , which benefited from another step down in housing prices. As a result, stocks took off as bond yields dropped along with the odds of another Federal Reserve interest rate hike. The S & P 500 closed Friday on a four-session winning streak and a weekly gain of more than 2%. That's the index's third straight weekly advance as the market got further confirmation that the disinflation trend is for real in the form of cooler consumer and producer price data on Tuesday and Wednesday. A smaller-than-expected decline in October retail sales on Wednesday also helped the disinflation argument. Less of a decline than anticipated in retail sales is a positive in the same way as a smaller-than-expected increase is a good thing in consumer inflation. The reports together showed the economy is slowing, which is what the Fed wants, but not so much so that we need to start placing a greater likelihood on a so-called hard landing. Last week's numbers support the idea that the Fed would be smart to hold off on any additional rate hikes for the foreseeable future or end its tightening cycle altogether. The odds on the next move by central bankers, according to the CME FedWatch tool, point to a rate cut, perhaps as early as in the first half of 2024. On the earnings front, nearly all the most recent quarterly results from S & P 500 companies are in. According to FactSet, 82% delivered upside earnings surprises while 62% reported better-than-expected revenue. Among the reports were Club names TJX Companies (TJX) and Palo Alto Networks (PANW) before and after the bell Wednesday. In both cases, the stocks sold off despite what we felt were largely positive updates. Our view? The declines in the off-price retailer and cybersecurity leader were buying opportunities as short-term-oriented traders were bailing on stocks of companies with otherwise strong underlying fundamentals and bright long-term outlooks. After making three trades this week, we're heading into a shortened trading week. The U.S. stock market will be closed on Thursday for Thanksgiving and will close early at 1 p.m. ET on Friday. With the closely followed S & P 500 Short Range Oscillator showing neither an overbought nor oversold market, we'll be looking at macroeconomic and company-specific news for guidance in the week ahead to possibly buy or sell stocks in our portfolio. Economic data We get existing home sales on Tuesday. It's not likely to be viewed as important as housing starts since we know we need more homes built to address the current housing shortage and unaffordability issues. However, it's worth watching as the data will give us insight into the demand environment, which speaks to the future path of prices. The inventory of previously owned homes is also low as people who got low mortgage rates during Covid are reluctant to sell and re-buy at today's much higher mortgage rates. On Wednesday, durable goods orders are out. They will provide insight into industrial activity and are viewed as a leading indicator of manufacturing activity. That said, this is a preliminary October reading. This data feeds the monthly factory orders report. Also, due to the Thanksgiving holiday on Thursday, weekly initial jobless claims are being released one day early. On Friday, we get a flash PMI report. This report isn't as market-moving as the ISM (Institute for Supply Management) purchasing managers index because it's based on a less complete data set. However, during a shortened trading session in a market starved for data, it's worth watching for additional clues about the health of manufacturing. Quarterly earnings Nvidia (NVDA) is set to release its fiscal 2024 third-quarter results on Tuesday after the closing bell. While the quarterly numbers will be important, as they always are, guidance and commentary around China are more likely to determine the direction of the next 10% move in the stock. We know that artificial intelligence chip demand is as hot as can be right now. The question investors have now is how long can that demand be sustained. Earlier in the week, we took a deeper look at what to expect heading into the print from Nvidia — our other "own it, don't trade it" stock. ( Apple was the first to get that Club designation from Jim Cramer.) NVDA YTD mountain Nvidia YTD Shares of Nvidia closed Nov. 14 at a record high of $496.56 each. While slightly off those levels, after breaking a 10-session winning streak Wednesday, the stock was up Thursday and down Friday. However, at around $493, Nvidia shares are not too far away from their all-time, intraday high of $502.66 on Aug. 24. Nvidia has, by far, been the Club's best-performing stock in 2023, with a year-to-date surge of more than 235%. Here's the full rundown of all the important domestic data in the week ahead, which also features a slew of earnings from brand-name retailers. Monday, Nov. 20 Before the bell: Niu Technologies (NIU) After the bell: Zoom Video Communications (ZM), Agilent Technologies (A) Tuesday, Nov. 21 8:30 a.m. ET: Existing home sales Before the bell: Kohl's (KSS), Medtronic (MDT), Lowe's (LOW), Best Buy (BBY), Baidu (BIDU), Abercrombie & Fitch (ANF), Burlington Stores (BURL), American Eagle Outfitters (AEO), Dick's Sporting Goods (DKS), Hibbett Sports (HIBB) After the bell: Nvidia (NVDA) , Autodesk (ADSK), HP (HPQ), Jack in the Box (JACK), Nordstrom (JWN), Urban Outfitters (URBN) Wednesday, Nov. 22 8:30 a.m. ET: Initial jobless claims 8:30 a.m. ET: Durable orders 2 p.m. ET: Fed meeting minutes Before the bell: Deere & Company (DE) Thursday, Nov. 23 Markets closed for Thanksgiving Friday, Nov. 24 9:45 a.m. ET: Flash PMI (See here for a full list of the stocks in Jim Cramer's Charitable Trust is long.) 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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