Stocks Eye Solid Weekly Gains Despite Election Jitters

Investors are hopeful that inflation has hit its peak

Digital Content Manager
Nov 11, 2022 at 12:26 PM
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Stocks largely brushed off Election Day jitters this week to nab sizable gains. It was not without any challenges, though -- the Dow Jones Industrial Average (DJI) snapped its three-day win streak after settling at its highest level since Aug. 25, as a political gridlock in Washington D.C. had Wall Street anxiously eyeing results from Senate races in Georgia, Arizona, and Nevada. 

That cloud soon lifted on the heels of a weaker-than-expected consumer price index (CPI) for October, with traders taking the report as a sign that inflation has hit its peak. In turn, the Dow added over 1,200 points and scored its best session since May 2020, as both the S&P 500 Index (SPX) and Nasdaq Composite Index (IXIC) added triple digits. Meanwhile, the Cboe Volatility Index (VIX) fell to its lowest level in nearly two months.

Tailwinds continued to blow on Friday, as China eased some of its recent Covid-19 restrictions. At the time of this writing, all three major indexes were eyeing weekly gains, with the SPX and IXIC expected to mark their best weeks in several months.

Most Notable Earnings Reports

Quarterly earnings reports continued to trickle in this week, with Take-Two Interactive (TTWO) slipping to a three-year low after sharing worse-than-expected fiscal second-quarter profits and revenue. Meanwhile, Novavax (NVAX) beat top line estimates, and AstraZeneca (AZN) surged after the company lifted its full-year guidance. Arguably the most notable report came from Walt Disney (DIS), though, which had a rough day after high streaming costs led to a $1.5 billion loss in its direct-to-consumer unit.

Electric vehicle (EV) makers also entered the confessional -- options traders blasted Lucid (LCID) after a quarterly miss, and strong deliveries became Nio's (NIO) saving grace. Elsewhere, Digital Turbine (APPS) was eyeing its best day since 2009 after the ad agency hiked its 2023 outlook, and investors flocked to surging Beyond Meat (BYND). Toast (TOST) also popped after the software concern shared a beat-and-raise

Top Headlines This Week

Traders also had some major corporate updates to unpack. Lordstown Motors (RIDE) surged after news that Foxconn will invest $170 million in the EV startup. Plus, Target (TGT) unveiled plans for a larger-format store that will allow it to better fulfill same-day orders. Also rocking Wall Street was Meta Platforms' (META) major layoff news, with roughly 13% of its workers getting axed. Lastly, Digital World Acquisition (DWAC) was sharply higher amid speculation over former U.S. President Donald Trump's potential 2024 election run.

Retail Giants Highlight Next Week's Earnings Docket

Next week brings another batch of earnings, with retail big-wigs anticipated to step into the limelight, including Bath & Body Works (BBWI), Foot Locker (FL), Home Depot (HD), Kohl's (KSS), Lowe's (LOW), Macy's (M), Target (TGT), Ross Stores (ROST), as well as Walmart (WMT). There will be no shortage of employment, inflation, and housing data to unpack, too. If you are still processing last week's Fed decision, see how Schaeffer's Senior Vice President of Research Todd Salamone is moving forward. Plus, dive into these top 10 sectors for short plays.

 

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