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Wednesday, November 30, 2022

Retailers disclose earnings, possible rail strike, Fed minutes and more: Tuesday’s 5 things to know

Former U.S. Secretary of Transportation Elaine Chao wishes current Sec. Pete Buttigieg ‘good luck’ in finding a solution to the looming railroad labor strike.

Here are the key events taking place on Tuesday that could impact trading.

RETAILER EARNINGS: A busy morning ahead for retail earnings, with Best Buy, Dollar Tree, Dick’s Sporting Goods, Abercrombie & Fitch and Chico’s FAS among the names reporting. 

Also watch for numbers from medical device maker Medtronic, chipmaker Analog Devices and entertainment company Warner Music Group. 

In the afternoon, we’ll hear from high-end department store chain Nordstrom and apparel retailer Guess.

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BEST BUY

 

A handful of tech names will also report: PC and printer maker HP Inc., cloud computing firm VMware and design and engineering software maker Autodesk.

 Just over 95% of the S&P 500 (481 companies) have reported 3Q numbers, and the results are mostly ahead of expectations.

Ticker Security Last Change Change %
DLTR DOLLAR TREE INC. 165.24 +1.88 +1.15%
DKS DICK’S SPORTING GOODS INC. 106.94 -2.15 -1.97%
ANF ABERCROMBIE & FITCH CO. 21.25 +2.63 +14.12%
CHS CHICO’S FAS INC. 7.11 -0.06 -0.84%
MDT MEDTRONIC PLC 82.29 +0.99 +1.22%
ADI ANALOG DEVICES INC. 159.24 -2.61 -1.61%
WMG WARNER MUSIC GROUP CORP. 31.05 +4.08 +15.10%
HPQ HP INC. 29.16 -0.32 -1.09%
JWN NORDSTROM INC. 21.27 -0.18 -0.84%
VMW VMWARE INC. 116.77 +0.21 +0.18%
ADSK AUTODESK INC. 206.50 -3.87 -1.84%

RAILROAD STRIKE LOOMS: A looming railroad-worker strike could disrupt some supply chains as soon as early December, hampering commerce. 

Investors will also be watching the shopping season to see the degree to which inflation is biting into consumers' purchasing power. 

Ticker Security Last Change Change %
CP CANADIAN PACIFIC RAILWAY LTD. 80.70 +1.54 +1.95%
CNI CANADIAN NATIONAL RAILWAY CO. 124.18 -0.24 -0.19%
CSX CSX CORP. 31.29 +0.41 +1.33%
NSC NORFOLK SOUTHERN CORP. 249.26 +2.50 +1.01%

RETAIL TRADE GROUPS SAY A RAIL STRIKE WOULD BE DEVASTATING TO THE ECONOMY

Railyard with box cars

This April 2, 2021, file photo shows freight train cars and containers at Norfolk Southern Railroad’s Conway Yard in Conway, Pa. (AP Photo/Gene J. Puskar, File) (AP Newsroom)

All of that complicates the Federal Reserve's balancing act between raising interest rates and fighting inflation, said Oanda analyst Edward Moya. 

"There's going to be some unwanted drivers here that will probably force the Fed to remain aggressive," he said. "And that's difficult for equities."

STOCKS SINK: U.S. stocks fell Monday as investors worried about a rise in COVID-19 infections overseas and the state of the economy at home heading into the key holiday season. 

The Dow Jones Industrial Average slipped 45.41 points, or 0.1%, to 33700.28, while the S&P 500 dropped 15.40 points, or 0.4%, to 3949.94. The Nasdaq Composite lost 121.55 points, or 1.1%, to 11024.51. 

Investors had hoped that signs of easing COVID-19 containment measures in China would allow for economic growth to pick up, also benefiting the global economy. 

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a New York Stock Exchange trader talking

Traders work on the floor at the New York Stock Exchange in New York, Wednesday, Nov. 2, 2022.  (AP Photo/Seth Wenig / AP Images)

Several Chinese cities said they would no longer carry out mandatory mass testing and lifted the requirement for residents to show proof of a recent negative test to enter public places. 

A rise in COVID-19 infections and the reporting of virus-related deaths for the first time in almost six months have caused investors to worry that China's normalization could instead be further delayed.

"All eyes are on China," said Hani Redha, a portfolio manager at PineBridge Investments. "Any attempt to reopen is going to be tricky because we know the pattern with these things: you get a spike in cases. We haven't even really got going and there are already a lot of cases."
 

WHAT THE FED SAID: Investors were anticipating a quiet week with the Thanksgiving holiday on Thursday. 

The biggest event on the economic calendar is Wednesday's release of the minutes of last Federal Reserve meeting.

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Fed Chairman Jerome Powell speaking at a podium

Federal Reserve Board Chair Jerome Powell. The minutes from the last Federal Reserve meeting will be released on Wednesday. (AP Photo/Jose Luis Magana / Associated Press)

Investors will be looking for clues to Fed officials' opinion on the pace of inflation, and whether it will prompt the central bank to ratchet down the pace of interest-rate increases. 

"It's very important for market players," said AvaTrade analyst Naeem Aslam.
 

CRYPTO FRAUD SCHEME: The FBI and Estonian police arrested two Estonian citizens Sunday for their alleged involvement in a $575 million cryptocurrency fraud scheme. 

Sergei Potapenko and Ivan Turõgin, both 37, are charged with conspiracy to commit wire fraud, 16 counts of wire fraud and one count of conspiracy to commit money laundering.

Prosecutors say the men persuaded victims to enter into fraudulent equipment rental contracts with the defendants’ cryptocurrency mining service, HashFlare. They also caused victims to invest in a phony virtual currency bank called Polybius Bank, which never paid out dividends. 

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Illustration of various cryptocurrencies

Representations of cryptocurrencies are seen in this illustration. (REUTERS/Dado Ruvic/Illustration / Reuters Photos)

The indictment charges Potapenko and Turõgin with conspiring to launder their criminal proceeds by using shell companies, phony contracts and invoices. The money laundering conspiracy allegedly involved at least 75 real properties, six luxury vehicles, cryptocurrency wallets and thousands of cryptocurrency mining machines.

"The size and scope of the alleged scheme is truly astounding," said Assistant Attorney General Kenneth Polite Jr. of the Justice Department's criminal division. "U.S. and Estonian authorities are working to seize and restrain these assets and take the profit out of these crimes."

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The FBI is investigating the case.

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