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The holiday season is underway, but several key earnings and economic reports will close the halls on Wall Street before markets close for the long Christmas weekend.

In the coming days, the economic calendar will provide investors with the latest personal consumption expenditures price index (or PCE), the Fed’s preferred measure of inflation, as well as another GDP reading, a batch of housing data and a Conference Board gauge. consumer confidence.

On the corporate side, earnings from Nike (NKE), FedEx (FDX), Micron Technology (MU), Carnival (CCL) will keep traders busy.

People walk through holiday decorations at the New York Stock Exchange (NYSE) in New York, U.S., Dec. 14, 2022. REUTERS/Andrew Kelly

Earnings and the economic outlook will offer the final clues to 2022’s key focus for investors heading into the new year; how much Federal Reserve officials will raise interest rates and whether those policy moves will push the US economy into recession.

The PCE price index, the Fed’s preferred measure of inflation, to be released on Friday, is the highlight of the week ahead.

On a monthly basis, PCE is expected to show a 0.1% increase in November, down slightly from 0.3% the previous month, according to Bloomberg consensus estimates. PCE inflation likely eased to 5.5% from 6% last year. Core PCE, which strips out volatile food and energy components, is expected to show a 0.2% increase from a month earlier, unchanged from October, and a slightly slower rise of 4.7% on the year, up from 5% last month. descending from

After the Fed’s final 2022 policy announcement on Wednesday, strategists noted that the most surprising data in policymakers’ economic forecasts was a revision in their core PCE expectations to 3.5% from 3.1% at the end of 2023.

“This was somewhat surprising to us as we thought a higher interest rate path would mean a lower inflation path, but these revisions show that the average member sees inflation as significantly stickier than they previously thought. in September,” Bank of America said. Michael Gapen and his team of strategists said in a recent note:

John Weil, chief global strategist at Nikko Asset Management, also noted that this means officials believe they should keep the terminal rate high until 2023, even assuming some delay effects.

Worries about “higher for longer” interest rates and the resulting economic downturn still weigh heavily on Wall Street this December, a period of traditional stock market growth that looks to be anything but this season.

Investors were hoping for a Santa Claus rally, a steady rally in the stock market that occurs around the end of the year holidays. Usually defined as covering the last five trading days of the year and the first two of the new year, regardless of the dates, hopes for this year’s rally have been dashed.

On Friday, US stocks posted their first weekly loss since September. For the week, the S&P 500 was down 2.1%, the Dow Jones Industrial Average was down 1.7% and the tech heavyweight Nasdaq Composite was down 2.7%.

At a news conference after the meeting, Fed Chairman Jerome Powell emphasized that he and his colleagues are committed to bringing inflation back to 2%, the US central bank’s long-term price stability target as measured by PCE.

The latest reading in October was three times that target at 6% and the headline figure at 5%. Meanwhile, the Consumer Price Index (CPI) rose 7.1% year-on-year in November. The CPI index sources data from consumers, while the PCE sources from businesses, each tracking different spending ranges. CPI, for example, includes only consumer medical spending, while PCE includes employer contributions.

Updates on the housing market will also be closely watched in the coming week. In December, the homebuilder survey and housing measurement launches, existing home sales and new home sales are all current. A key component of sticky inflation is rising housing costs.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference after the Federal Reserve Board meeting on December 14, 2022 at the Federal Reserve Board building in Washington.  raising its benchmark lending rate by half a percentage point as its policy actions turn around the economy.  (Photo by Nicolas Camm/AFP) (Photo by NICHOLAS CAMM/AFP via Getty Images)

Federal Reserve Chairman Jerome Powell speaks at a press conference on December 14, 2022 in Washington, DC. (Photo by NICHOLAS KAMM/AFP via Getty Images)

The government will release its third and final estimate of GDP, the broadest measure of US economic activity, likely to show real gross domestic product growing at an annual rate of 2.9 percent in the third quarter of 2022. unchanged from previous estimates. The Conference Board’s Consumer Confidence Index, which tracks US consumer attitudes, spending plans and expectations for inflation, stock prices and interest rates, will also be released.

On the corporate side, earnings from FedEx and Nike will be key gauges of consumer spending during the all-important holiday shopping season, while Micron’s results will provide the latest look at the chip industry.

Economic calendar

Monday. NAHB Housing Market IndexDecember (expected 34, last month 33)

Tuesday. Housing construction beginsNovember (1,400 million expected, 1,425 in the previous month); Building permitsNovember (expected 1.480 million, last month – 1.526 million, revised down to 1.512 million); Housing construction beginsfor the month, November (expected -1.8%, during the previous month -4.2%); Building permitsmonthly, November (expected -2.1%, last month -2.4%)

Wednesday. MBA mortgage applicationsWeek ended December 16 (-3.2% over previous week); Current account balance, 3rd quarter (-223.5 billion dollars expected, -251.1 billion dollars in the previous month); Existing homes for saleNovember (expected 4.20 million, during the previous month – 4.43 million); Existing homes for salefor the month, November (expected -5.2%, during the previous month -5.9%); Conference Board Consumer ConfidenceDecember (expected 101.0, last month 100.2); Current status of the Conference BoardNovember (137.4 during the previous month); Conference Board ExpectationsNovember (75.4 in the previous month)

Thursday. Chicago Fed National Activity IndexNovember (-0.05 over the previous month); GDP per yearquarter-on-quarter, third-quarter estimate (2.9% expected, 2.9% previously); Personal consumptionquarter-on-quarter, third quarter estimate (expected 1.7%, previously 1.7%); GDP price indexquarter-on-quarter, third quarter estimate (4.3% expected, 4.3% previously); Core PCEquarter-on-quarter, third quarter estimate (4.6% expected, 4.6% previously); Initial unemployment claimsWeek ended Dec. 17 (222,000 expected, 211,000 last week); Continuous requirementsWeek ended December 10 (expected 1.685, last week 1.671 million); Leading indexNovember (-0.5% expected, -0.8% during the previous month); Kansas City Manufacturing IndexOctober (-2 expected, 1 in previous week)

Friday: Personal incomemonthly, November (0.3% expected, 0.7% last month); Personal expensesfor November (0.2% expected, 0.8% last month); Actual personal expensesmonth-on-month, November (0.0% expected, 0.5% last month); PCE deflatorfor November (0.1% expected, 0.3% last month); PCE deflatorfor the year, November (5.5% expected, 6.0% last month); PCE main deflatorcompared to November (0.2% expected, 0.2% last month); PCE main deflatorfor the year, November (4.7% expected, 5.0% last month); Durable goods ordersNovember preliminary (-1.0% expected, 1.1% last month); Duration excluding transportNovember preliminary (0.0% expected, 0.5% last month); Orders for non-defense capital goods, excluding aircraftNovember preliminary (0.2% expected, 0.6% last month); Shipments of non-defense capital goods other than aircraftNovember preliminary (-0.2% expected, 1.5% in the previous month); University of Michigan Consumer SentimentsDecember final (59.1 expected, 59.1 ahead); New house for saleNovember (600,000 expected, 632,000 last month); New house for salemonthly, November (-5.1% expected, 7.5% last month)

Earnings calendar

Monday. Heico (HEI), Steelcase (SCS)

Tuesday. Nike (NKE), General Mills (GIS), FedEx (FDX), FactSet (FDS), CalAmp Corp. (CAMP), Blackberry (BB), FuelCell Energy (FCEL), Neogen (NEOG), Worthington Industries (WOR)

Wednesday. Micron Technology (MU), Cintas (CTAS), MillerKnoll (MLKN), Rite Aid (RAD), Toro (TTC), Carnival Cruises (CCL)

Thursday. CarMax (KMX), Apogee Enterprises (APOG), Paychex (PAYX)

Friday: No outstanding reports are scheduled for publication.

Alexandra Semenova is a Yahoo Finance reporter. Follow him on Twitter @alexandraandnyc

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