By Wallace Witkowski, MarketWatch
Sky-high stock prices face barrage of economic data
The health of the U.S. manufacturing sector, as well as the outcome of a highly anticipated meeting of the Organization of the Petroleum Exporting Countries, are among the highlights of a heavy week of economic data following the Thanksgiving holiday.
Stocks finished the foreshortened holiday week at fresh records (http://www.marketwatch.com/story/dow-poised-for-fresh-record-highs-black-friday-boost-in-view-2016-11-25) with the both the Dow Jones Industrial Average and S&P 500 index turning in a fourth consecutive session of record closes. For the week, the Dow rose 1.5%, the S&P 500 gained 1.4%, and the Nasdaq Composite index , which also closed at a record Friday, rose 1.5%.
While the Friday's jobs report will be the last one before a widely expected Federal Reserve rate hike () in December, Karyn Cavanaugh, senior market strategist at Voya Financial, said her main focus of the week will be manufacturing data.
"We need to see if the economic engine is still running," Cavanaugh said. While manufacturing is considered to account for about 12% of the economy, she said, gross manufacturing output accounts for more like a third of the economy when you consider how manufacturing affects other areas.
On Wednesday, November Chicago PMI data is set to be released, while Markit releases its manufacturing PMI gauge and the Institute of Supply Management releases its November manufacturing figures on Thursday.
"The first thing you want to seeis the market hold its gains, you don't want to see a giveback, a rotation back into defensives," said Robert Pavlik, chief market strategist at Boston Private Wealth.
Over the month of November, defensive sectors like utilities and consumer staples stocks have lagged the S&P 500, declining 5% and 3% respectively, while telecom has slightly outperformed the broader index. Sectors turning in big gains on the S&P 500 in November have been financials, industrials, and consumer discretionary.
With the wealth of economic data on the week, Pavlik said his main focus will be on the OPEC meeting. Oil prices drifted lower on Friday as traders adopted a wait-and-see attitude about the Wednesday meeting (http://www.marketwatch.com/story/oil-prices-drift-lower-but-analysts-caution-over-bets-against-opec-2016-11-25). Investors will be watching to see if the cartel implements a production cap.
"That's going to drive oil prices over the near term for another month or so," Pavlik said. "There's a lot of speculation that they can't come to an agreement, but everybody realizes they may."
Other economic data on hand include third-quarter GDP figures on Tuesday; October consumer spending, October core inflation figures, and the Fed's Beige Book on Wednesday; and November auto sales on Thursday.
There's still a smattering of companies that have yet to release earnings. With practically all of the S&P 500 having already reported, third-quarter earnings for companies on the index are on track to rise 3.2 % from the year-ago quarter.
With Black Friday sales (http://www.marketwatch.com/story/heres-a-black-friday-play-as-retail-stocks-take-a-different-turn-2016-11-25) being tallied and Cyber Monday sales on hand, fourth-quarter earnings for internet retailers are expected to see the greatest growth while traditional retailers are expected to see an earnings pullback, according to John Butters, senior earnings analyst at FactSet.
Notable earnings scheduled
Report date Company/ticker (FactSet EPS / revenue estimates)
Mon., Nov. 28 Shoe Carnival Inc. US:SCVL (56 cents / $277.4 million)
Tues., Nov. 29 Autodesk Inc. US:ADSK (per-share loss 24 cents / $476.8 million) Tiffany & Co. US:TIF (67 cents / $923.8 million)
Weds., Nov. 30 Synopsis Inc. US:SNPS (77 cents / $628.4 million) Guess Inc. US:GES (14 cents / $548.9 million)
Thurs., Dec. 1 Kroger Co. US:KR (41 cents / $26.33 billion) Dollar General Corp. US:DG (93 cents / $5.36 billion) Ulta Salon, Cosmetics & Fragrance Inc. US:ULTA ($1.37 / $1.11 billion) PVH Corp. US:PVH ($2.40 / $2.23 billion)
Fri., Dec. 2 Big Lots Inc. US:BIG (per-share loss 1 cent / $1.12 billion)
(END) Dow Jones Newswires
November 25, 2016 13:50 ET (18:50 GMT)
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