Short Week Packed with Earnings After Sell-off

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Monday, November 24th. There's still plenty of business ahead before investors tuck into their Thanksgiving meals. A host of Treasury auctions and a busy earnings schedule dominate the next two days before Thursday's holiday closure, while buzz continues from Wall Street's descent last week to two-month lows and a dramatic sell-off in crypto. Rate cut hopes got a lift Friday after New York Federal Reserve President John Williams sound amenable to a December easing, though Boston Fed President Susan Collins said Friday she needs to see more data.

0:57Williams is an influential member, but we believe a cut in December is unlikely, said Cooper Howard, Director of Fixed Income Research and strategy at the Schwab Center for Financial Research. The Fed speaker's schedule slows this week, and one holiday game investors can play is trying to determine which policymaker stands where on the question of a December cut. As of late Friday, odds of a 25 basis point easing in December stood at 71.5 percent, according to the CME FedWatch tool. That was up sharply from below 40 % earlier in the week. That drop in rate cut chances contributed mightily to the sell-off.

1:37Investors might also want to track the SIBO Volatility Index, or VIX, for possible insight into market direction. The VIX soared last week to above 28 on Thursday and above 27 Friday, before cooling off by Friday's close. It's still elevated at above 23, compared with a 200-day moving average of under 20. A move below 20 would be more ideal for the bulls in my view, said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research. This week will be holiday shortened, but there will be a barrage of economic data hitting the tape Wednesday, so the potential for market volatility is there.

2:19I'm not sure if the recent pullback in stocks or investor concerns around AI has been fully played out yet, but Friday's price action is encouraging from a near-term perspective. Bitcoin futures fell as low as$80 ,000 before the weekend and fell about 10 % for the week. Though stocks staged a minor comeback Friday after Thursday's crushing reversal downward, there likely needs to be some stability in the crypto market before stocks can get fully on the path to recovery. Many crypto investors potentially face margin calls after the currencies dropped below long-term support lines on the charts.

2:58Several important treasury auctions are on tap before the holiday. Today features a two-day auction followed tomorrow by a five-year auction. Auctions earlier this month were weak, possibly a factor that recently propelled yields to one-month highs, one reason stocks have been pressured.

3:19Stocks surged Friday as the market factored in more hope of a December rate cut, though the October cut didn't have any appreciable impact on longer-term yields like the 10-year. Longer-term yields affect consumer and business borrowing costs more than the short-term yields controlled by minor changes in Fed policy, something investors should keep in mind before celebrating if the Fed cuts next month. Some data arrived tomorrow before the open, though it's two months old. The September producer price index, or PPI, one of many reports delayed by the shutdown, is due at 8.30 a.m. Eastern Time Tuesday, and analysts expect an increase of 0.3 percent overall and 0.2 percent for the core reading that excludes food and energy, according to briefing.com.

4:06A 0.3 percent month-over-month rise, if that ends up the case, probably won't be enough to ease concerns about stubborn inflation. PPI tracks the wholesale market where the first impact of tariffs often shows up before passed along to consumers. Expectations are for the headline PPI number to increase by 2.6 percent euro-year, Schwab's Howard said. A surprise to the upside has the potential to cause yields to move higher. Retail sales for September are also due tomorrow at the same time, and analysts expect a solid 0.4 percent increase. However, none of those numbers say much about what the economy is doing today, and data beyond this week looks sketchy, with no major reports on the Bureau of Labor Statistics release schedule page until October Job Openings and Labor Turnover Survey, or JOLTS, data arrive December 9th.

5:02That's the same day the Fed begins its meeting. Monthly U.S. jobs data for November won't be out until after that on December 16th. Another full day of earnings awaits investors tomorrow in a last blast before the schedule quiets ahead of Thursday's holiday and Friday's shortened session. Some of the reports to watch Tuesday include Chinese retailer and tech firm Alibaba, analog devices, Best Buy and Dick's Sporting Goods. Dell wraps it up after tomorrow's close. Walmart, Target, Home Depot, Lowe's, Gap and other retailers that reported last week reinforced ideas that consumers remain cautious in some respects.

5:45The so-called K-shaped economy that sees well-off investors generally doing well and lower-income families struggling showed up in some of the reports, while Walmart hinted that pain is widespread. Both lower and higher-income families appear to be seeking bargains. The University of Michigan's final November consumer sentiment data came in at a headline of 51.0. Consensus had been for no change from the initial November reading of a lackluster 50.3, according to Briefing.com. Long-run inflation expectations fell to 3.4 percent from 3.6 percent, a positive sign. The government won't release an October jobs report, and November data, which will also include whatever numbers the government can find from October, won't be available until December 16th after the Fed's meeting.

6:40That's probably the main thing limiting chances of a Fed move next month. Though tomorrow features a packed earnings schedule, most of the season is over other than Deere on Wednesday. Last week saw many of the large firms topping analysts' consensus on revenue, including key companies like Walmart, NVIDIA, Palo Alto Networks, TJX, and Home Depot. Major indexes recovered slightly on Friday, but the rally fizzled slightly by the close, and stocks finished well off their intraday highs. Still, technically, the close was significant because the S &P 500 index finished above its 100-day moving average, a line it closed below on Thursday for the first time in more than six months.

7:27Staying above that level, which was 6 ,548 as of Friday's close, could be key this week as it aligns closely with the October S &P 500 low. Friday's drop below that intraday appeared to attract some bidding to defend the 100-day line. The price action is encouraging, Peterson said. Therefore, from a near-term perspective, investors appear to have a line in the sand to trade against and the near-term assessment is moderately bullish. Though major indexes finished off their highs Friday, all sectors managed to close higher, another bullish sign. Communication services led, but healthcare and materials, two sectors that drew support during a rotation out of tech earlier this month, also posted strong outings, up more than 2%.

8:16On another encouraging note, the rally Friday came without much participation from the tech sector, which the market has depended on all year. Chip stocks, however, rose about 0.9 % Friday, despite NVIDIA struggling to find buyers. Checking individual stocks, HomeBuilder shares led the pack Friday on hopes for falling interest rates, with stocks like KB Home, DR Horton and Lennar all up 6 % or more. These three are all down from late summer highs, however. The Nasdaq Bank Index, which sank Thursday, roared back more than 3 % Friday, spurred on by hopes that a rate cut might spark lending demand.

8:57Major automaker stocks also surged, along with airlines and other consumer stocks. Gap spiked 8 % after the retailer beat analysts' earnings consensus and reported sales rising 5 % as stores open a year or more. It also raised its fiscal 2026 revenue to above the consensus view. NVIDIA got shut out of the rally and finished the week near one-month lows, despite analysts praising its earnings data. Shares of the AI giant descended nearly 5 % last week and are nearly 15 % below their all-time peak recorded late last month. The Dow Jones Industrial Average climbed to 493.15 points Friday, or 1.08%, to 46 ,245.41.

9:48The S &P 500 Index added 64.23 points, or 0.98%, to 6 ,602.98. and the Nasdaq Composite gained 195.03 points, or 0.88%, to 22 ,273.08. For the week, the Dow Jones Industrial Average slipped 1.91%, the S &P 500 Index fell 1.95%, and the Nasdaq lost 2.74%. November is on pace to be the first losing month on Wall Street since April, with only three full trading days left before December. This has been the Schwab Market Update podcast. To stay informed, visit www.schwab.com slash market update or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review.

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