By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch
Retail in the spotlight after weekend of holiday shopping
U.S. stocks edged lower Monday but remained on track to post
modest monthly gains, as investors prepared for a busy week of
economic releases and central-bank watching while also weighing the
kickoff of the holiday shopping season..
The S&P 500 was down 2.3 points or 0.1%, at 2,087. The Dow
Jones Industrial Average fell 23 points, or 0.1%, to 17,775. The
Nasdaq Composite lost 3 points or less than 0.1% at 5,124.
The week could be volatile for markets, with a policy meeting at
the European Central Bank on Thursday and a speech by Federal
Reserve Chairwoman Janet Yellen on the docket. Friday brings the
last batch of U.S. jobs numbers before the Fed's December policy
meeting and a meeting of the Organization of the Petroleum
Exporting Countries.
(http://www.marketwatch.com/story/dont-expect-saudi-arabia-to-back-down-when-opec-meets-2015-11-25)
The major indexes were left mostly flat in last week's
holiday-shortened trade. For November, the Nasdaq Composite is
looking at a gain of around 1.5%, while the Dow industrials and
S&P 500 index are less buoyant, set to add around 0.8% and
0.5%, respectively.
Reason to rally? The Chicago PMI, or business barometer, fell
back into contractionary territory in November
(http://www.marketwatch.com/story/chicago-pmi-tumbles-back-into-contractionary-territory-in-november-2015-11-30).
This is the last major regional release before the Institute for
Supply Management's manufacturing gauge, set for release on Tuesday
morning. Meanwhile, pending home sales edge up 0.2% in October
(http://www.marketwatch.com/story/pending-home-sales-edge-up-02-in-october-2015-11-30),
following two months of declines.
This week, a steady trickle of data builds to the November
nonfarm payrolls report on Friday.
Barring a surprise on the downside in the upcoming data
releases, investors are largely expecting that the Fed will hike
rates in December. The market-implied probability of a December
rate increase was 78% Monday morning, according to the CME Group's
FedWatch Tool
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html),
which tracks Fed-funds futures prices.
See: November jobs report likely to give Fed go-ahead to raise
interest rates
(http://www.marketwatch.com/story/november-jobs-report-likely-to-give-fed-go-ahead-to-raise-interest-rates-2015-11-29).
"The question should now shift however to how the economic data
stacks up in moving towards a second hike in early 2016," said
Peter Boockvar, chief market analyst at The Lindsey Group, in a
note.
This is particularly important for the U.S. dollar, Boockvar
added, "in the context of the large bullishness of it based
predominantly on the fact that the Fed's monetary policy is
diverging from everyone else."
Investors will also be watching closely a speech by the Fed's
Yellen on Wednesday. On Thursday, they'll look to see whether ECB
President Mario Draghi delivers further easing as expected, and
whether any action taken will be enough to keep markets happy.
The market is in position to rally and could reach record highs
by the end of the year, said Peter Cardillo, chief market economist
at First Standard Financial. He added that a potential Fed hike has
largely been factored in.
"I still think we'll see new highs, between 2,175 and 2,200 by
year-end [on the S&P 500], in spite of a possible change in
monetary policy and in spite of a strong dollar," he said. "The
fact that the ECB is likely to increase stimulus is a plus for
global equities."
Stocks to watch: Traders may be looking to the retail sector to
add some end-of-month sparkle, though there are concerns about
slower-than-expected Black Friday sales in stores. Some are worried
that if early returns on Cyber Monday sales are also weak, then
that could dampen what appetite is out there for retail stocks
(http://www.marketwatch.com/story/holiday-sales-wage-data-likely-to-drive-stocks-this-week-2015-11-29).
A National Retail Federation survey on Sunday found that more
people shopped online than in stores during the holiday weekend
(http://www.marketwatch.com/story/online-shopping-tops-stores-on-black-friday-weekend-2015-11-29-19103331).
Amazon.com Inc. (AMZN) is among the retailers in the spotlight
as investors get ready to assess the holiday weekend of sales.
Amazon's shares rose 0.5% after the opening bell, while Under
Armour shares (UA) opened down 3.6%.
Shares of Microsoft Corporation (MSFT) rose 1.5% to lead Dow
gainers, after the company got upgraded to strong buy from market
perform at Raymond James, and Fitbit (FIT) shares rose 3% after the
company got upgraded to overweight from equalweight at
Barclays.
Computer Sciences Corporation shares (CSC) rose 3.7%, after the
company began trading as two separate companies Monday after the
spinoff of its public-sector company as CSRA Inc
(http://www.marketwatch.com/story/computer-sciences-spins-off-into-2-separate-companies-2015-11-30-91035350).
CSRA's (CSRA) shares rose 3.2% after the opening bell.
Other markets:Oil prices
(http://www.marketwatch.com/story/oil-prices-pause-ahead-of-central-bank-opec-meetings-2015-11-30)
turned higher Monday ahead of another major event this week, the
OPEC meeting on Friday. Pressure is building on Saudi Arabia to cut
oil output, but many say the kingdom is unlikely to change its
approach
(http://www.marketwatch.com/story/pressure-builds-on-saudi-arabia-before-fridays-opec-meeting-2015-11-30).
Gold prices edged higher Monday morning but were en route for
the biggest monthly loss in over two years
(http://www.marketwatch.com/story/gold-dips-set-for-biggest-monthly-loss-in-more-than-2-years-2015-11-30).
The dollar
(http://www.marketwatch.com/story/dollar-pinned-down-as-ecb-and-us-payrolls-line-up-this-week-2015-11-30),
meanwhile, was eyeing the best month since January, boosted by
rising rate-hike expectations.
The Stoxx Europe 600 index
(http://www.marketwatch.com/story/european-stocks-climb-ahead-of-key-policy-data-week-2015-11-30)
was set to rise 2.5% for November. In Asia
(http://www.marketwatch.com/story/china-november-stock-gains-nearly-wiped-out-by-broker-probe-2015-11-30),
the Shanghai Composite managed a 1.9% gain for November, but much
of the month's gains were wiped out by an investigation into
China's biggest brokerage houses. The index is up just 16% from its
Aug. 26 bottom.
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(END) Dow Jones Newswires
November 30, 2015 10:23 ET (15:23 GMT)
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