What to watch this week

The final full week of trading for the month of November will bring investors two crucial earnings reports and the restoration of the September jobs report, which will set the tone for the year’s final weeks of trading.

Results from Nvidia (NVDA) after the close on Wednesday and Walmart (WMT) on Thursday morning will provide an update on the AI trade and the US consumer, which have offered investors reasons for enthusiasm and caution in the last few weeks.

This past week, US stocks battled their way back from a tech-led sell-off on Thursday as the government shutdown ended and investors recalibrated their bets on a December interest rate cut. The tech-heavy Nasdaq Composite (^IXIC) finished a volatile week of trading with a 0.4% loss, while the S&P 500 (^GSPC) was little changed and the Dow Jones Industrial Average (^DJI) eked out a 0.3% gain.

With the longest US government shutdown on record finally ending late Wednesday, the question now becomes what the economic cost will be when investors — and Federal Reserve officials — get the long-delayed updates on the US economy.

On Thursday, the government will begin playing catch-up with the release of the September employment report, originally scheduled for release on Oct. 3, delivering the first official update on the US labor market since September.

However, comments from White House officials late last week suggested we may not get a complete report this month. Combine this with a more cautious tone from Fed officials last week on the need for additional rate cuts, which shifted bets that the central bank will lower rates next month from a sure thing to a coin toss.

Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments

A washout in crypto markets also sent bitcoin (BTC-USD) tumbling back below $95,000 at its lows on Friday and nearly wiped out year-to-date gains for the world’s largest cryptocurrency, souring sentiment across financial markets.

In addition to reports from Nvidia and Walmart, the earnings calendar will bring other key retail reports to the fore, with updates expected from Home Depot (HD), Target (TGT), Lowe’s (LOW), Amer Sports (AS), and Gap (GAP).

Economic data will remain spotty, with a full return to a normal data schedule still out of sight, but private data on manufacturing activity from S&P Global and the University of Michigan’s consumer sentiment index for November, both of which are set for release on Friday, will serve as the main highlights in the coming week.

The major stock indexes finished last week flat. It felt much worse for many investors.

On Thursday, the markets were under pressure, and much of the focus was on the tech sector. By Friday, investors were reading stories about the spreads on Oracle’s (ORCL) credit default swaps blowing out. The stock is down by almost 30% this month.

When the dust settled on the week, the indexes might’ve offered some reassurance for investors, with the tech-heavy Nasdaq Composite closing little changed. And as Truist Wealth chief investment officer Keith Lerner wrote in a client note early Friday, “The bull market continues to deserve the benefit of the doubt.”

Read more: What is a bull market? Definition, examples, and investment strategies.

The market action this year, however, also presents its own challenges, and in Lerner’s view, creates the conditions for some of the jumpiness we’ve seen of late, especially around investor sentiment.

The dramatic sell-off that followed Trump’s “Liberation Day” announcements was only seven months ago.

Since then, the S&P 500 is up almost 40%, and the Nasdaq is up over 50%. At its highs, Nvidia stock had more than doubled from these lows, while AMD (AMD) stock has almost tripled and Micron (MU) shares have almost quadrupled. The S&P 500 hasn’t had a 5% pullback since that April correction.

“Sentiment is resetting quickly, which should eventually set the stage for stocks to reclimb the proverbial wall of worry,” Lerner wrote, noting that the closely watched AAII survey showed bearish sentiment reaching a two-month high this week.

“Pullbacks are never comfortable, but they are the admission price for participating in the potential of stronger long-term stock market returns,” Lerner added.

And those long-term returns are driven by earnings, which have held up well through this year’s headline volatility.

With over 90% of S&P 500 companies having reported results for the third quarter, earnings are tracking toward 13.1% growth over the prior year. Should this growth rate hold, it would mark the fourth straight quarter of double-digit gains, according to FactSet’s John Butters.

“Despite the possibility of further weakness — which, for investors who are underweight, we would lean into — the weight of the evidence suggests the tech sector’s secular growth story remains intact, underpinned by strong earnings momentum,” Lerner said.

It’s an argument that will be put to the test with Nvidia’s results this week.

Italicized reports may be delayed or not available due to the government shutdown from Oct. 1 to Nov. 14.

Economic data: New York Fed Empire Manufacturing, November (6.7 expected, 10.7 previously)

Earnings: XPeng (XPEV), Trip.com (TCOM)

Economic data: ADP weekly employment; Homebuilder sentiment, November (37 expected, 37 previously); Import price index, October; Industrial production, October

Earnings: Home Depot (HD), Baidu (BIDU), Amer Sports (AS), PDD Holdings (PDD), Medtronic (MDT), Dolby (DLB), Klarna (KLAR)

Economic data: MBA Mortgage Applications; Housing starts, October; Building permits, October

Earnings: Nvidia (NVDA), Palo Alto Networks (PANW), Lowe’s (LOW), Target (TGT), TJX (TJX), Bullish (BLSH), Williams-Sonoma (WSM), Jack in the Box (JACK)

Economic data: Philly Fed business outlook, November (2 expected, -12.8 previously); Existing home sales, October (+0.5% expected, +1.5% previously); Initial jobless claims; Nonfarm payrolls, September (22,000 previously); Unemployment rate, September (4.3% previously)

Earnings: Walmart (WMT), Warner Music (WMG), NetEase (NTES), Intuit (INTU), Bath & Body Works (BBWI), Gap (GAP), Post Holdings (POST), WeBull (BULL)

Economic data: S&P Global US manufacturing PMI, November flash reading (52 expected; 52.5 previously); S&P Global US services PMI, November flash reading (54.5 expected; 54.8 previously); University of Michigan consumer sentiment, November (50.5 expected; 50.3 previously)

Earnings: BJ’s Wholesale Club (BJ)

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