Wall Street traders are excited about the coming week, and not just because the Fed is about to make its next interest rate decision. After a moderate course of trading on Friday, investors are taking the risk shortly before the market closes.
After yesterday's recovery move, Wall Street closed in the red on Friday. In the course of the indices moved between gains and losses, in the late business they turned down. The Dow Jones index lost 0.9 percent to 33,476. S
Monetary policy was once again the focus. This time it was the much-anticipated US producer prices for November that should provide clues on the Fed's next move. They were double-edged. On the one hand, they rose more than expected. This view eventually prevailed. On the other hand, at 7.4 percent, they were well below the 8 percent increase in the previous month. This confirmed hopes that inflation might have peaked. By midweek, US unit labor costs in the third quarter were already pointing in this direction. Meanwhile, the Michigan index was higher than expected on Friday.
On Tuesday, another important price indicator will be published with the consumer prices for November, before the highlight of the week with the US Federal Reserve's interest rate decision will follow on Wednesday. The market sees a 75% chance that the Fed will hike rates by 0.5 percentage point next week.
"The next four trading days will see important economic reports and Fed decisions that will probably determine the course of the markets for the next six months," Fundstrat said.
In the FX market, the dollar held up well after oscillating between gains and losses. The price data can be read in both directions, it said.
In the bond market, yields rose after price data and the strong Michigan index. The 10-year yield rose 9.6 basis points to 3.58 percent.
Oil prices held up well after the previous day's losses.
Among the individual stocks, Broadcom gained 2.6 percent. The semiconductor group had presented strong fourth-quarter figures and a better-than-expected outlook. The development of earnings in the past quarter was also better than expected, and sales met market expectations.
Lululemon lost 12.8 percent. The sportswear retailer reported third-quarter results that were as forecast or slightly better. However, Lululemon's like-for-like sales growth for its stores fell well short of market forecasts. In addition, inventories rose by a whopping 85 percent over the year.
Blue Apron (-0.1%) plans to lay off about 10 percent of its employees and plans further savings in the face of customer dwindling and competitive pressure. As the recipe box mailer announced, the job cuts are expected to cost about $1.2 million in severance pay and other expenses.
Apple and Ericsson have settled a legal dispute over the use of Ericsson technologies. As Ericsson announced, the two companies have signed a multi-year global license agreement. Apple gave up 0.3 percent.
