A trader works on the floor of the New York Stock Exchange (NYSE) on November 8, 2021.
Brendan McDermid | Reuters
Markets were closed Thursday for Thanksgiving, so stocks posted small gains on Wednesday that stemmed the week’s losses for the S&P 500 and Nasdaq Composite.
Treasury yields climbed this week, putting pressure on high-growth stocks. The Nasdaq is down 1.3% for the week, while the S&P 500 is up less than 0.1% and the Dow Jones is up around 0.6%.
The last few weeks of the year are usually a busy time for the market, with the so-called Santa Claus rally usually creating a happy holiday season for Wall Street. The S&P 500 is up 25% year-to-date.
Friday also marks the unofficial start of the holiday shopping season, as investors will be looking for information on Black Friday to determine the mood of the American consumer.
Retail stocks have seen dramatic moves back and forth during this earnings season. Gap and Nordstrom shares fell more than 20% on Wednesday, but Kohl’s jumped more than 10% a week ago after reporting strong sales growth.
Retail executives spoke during the quarter about how they are dealing with supply chain issues and inflation. It also remains to be seen whether the discussion of supply chain issues caused consumers to start holiday shopping earlier, potentially weighing on fourth-quarter sales.
“I wouldn’t be surprised if this was a dynamic around the holiday season,” said Sarah Henry, portfolio manager at Logan Capital Management. She added that her company was looking for companies with long-term strategic advantages rather than trying to bet on the best vacation sales results.
Wednesday also saw several strong economic reports, with personal income and consumer spending for October higher than expected and initial jobless claims hitting their lowest level since 1969. However, Core PCE, the preferred inflation gauge the Fed, remained high at 4.1%.
No major economic release is expected on Friday. The exchange will close at 1 p.m. ET Friday due to the statutory holiday weekend.