Wall Street Rallies, VIX Spirals as Inflation Data Rolls In

The VIX, however, is in the midst of a weekly rut

Deputy Editor
Nov 17, 2023 at 1:03 PM
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The week kicked off on a sour note after Moody's Investors Services slashed its U.S. credit rating outlook to "negative," though the Dow Jones Industrial Average (DJI) managed to turn in a modest win on Monday. Upbeat inflation data helped the blue-chip index score its third-straight win, while falling Treasury yields boosted the S&P 500 (SPX) and Nasdaq Composite (IXIC). Wall Street's rally held strong midweek, as more positive inflation data rolled in to overshadow lackluster retail sales data.

All good things must come to an end though, and the DJI snapped its daily win streak, while the Cboe Volatility Index (VIX) eyed a fourth-consecutive weekly drop. As of Friday afternoon, all three benchmarks are modestly lower, yet still heading for solid weekly wins.

Retail Earnings to Unpack Before the Holidays

While reports are beginning to  taper off, retail earnings were in focus leading up to the holiday shopping season. Target (TGT) performed particularly well in the earnings confessional, surging after sharing an upbeat holiday quarter forecast. TJ Maxx parent TJX Companies (TJX) wasn't so lucky, forecasting a weaker-than-expected forecast for the same period as its retail sector peer.

Apparel retailer Gap (GPS) was bombarded with bull notes and options traders' attention after its quarterly report included earnings and revenue wins, while blue-chip home improvement retailer Home Depot (HD) also beat expectations.

 

A Lot to Pack in During the Holiday-Shortened Week

Thanksgiving is next week, meaning Wall Street will get a brief break. However, there's still plenty of earnings set for release, especially more major retail names, as well as the Federal Reserve's meeting minutes to digest. In the meantime, here's what to make of the VIX's recent losing streak, and why SPX bulls should be operating with caution, but not panic.

 

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