Stock market today: stocks end mixed after data dump

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Investors had something to think about ahead of the Thanksgiving holiday, chewing on a huge amount of economic data.

Kicking off were weekly jobless claims – released a day earlier due to tomorrow’s vacation – which plunged to 199,000 in the week ended November 20, well below the week’s 270,000. latest and economists’ forecasts of 260,000 claims. In addition, it was the lowest level for initial jobless claims since 1969.

Income and personal expenditure data for October, which were higher than estimated (up 0.5% and 1.3%, respectively, from September), and an upward revised reading of the product Third-quarter gross domestic (at 2.1% versus an initial estimate) were also in the spotlight. 2.0%.

However, all was not rosy. The University of Michigan consumer confidence index hit its lowest level in 10 years in November and the core personal consumption expenditure index (PCE) – a key measure of inflation used by the Federal Reserve – grew 4.1% year-on-year in October, the fastest annual pace since 1991.

Additionally, the release of the minutes from the last Fed meeting showed that several committee members said the central bank “should be ready to adjust the pace of asset purchases” and / or raise rates. interest sooner than expected if inflation continues to soar.

“Looking at the Fed’s economic outlook, it’s clear that inflation has accelerated more than expected and the magnitude of the price hike has increased significantly,” writes Bob Miller, Head of Income Securities sets fundamentals for the Americas at BlackRock.

“While the bar for accelerating the reduction in asset purchases is high, it is not insurmountable and seems reasonably likely to be crossed if we see another strong payroll report and data on the inflation in December, “he adds. “Accelerating the reduction in asset purchases would potentially end purchases in March 2022 and then open the door for the Committee to consider exiting the zero policy rate in the second quarter of the year.”

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At the close, the S&P 500 Index was up 0.2% to 4,701 and the Nasdaq Composite had gained 0.4% to 15,845. Dow Jones Industrial Average was not as strong, dropping 0.03% to 35,804.

As a reminder, the US stock market will be closed tomorrow for Thanksgiving and trading will end early on Black Friday.

Other stock market news today:

  • Small cap Russel 2000 gained 0.2% to 2,331.
  • U.S. crude futures contracts slipped 0.1% to close at $ 78.39 a barrel.
  • Gold Futures gained marginal to $ 1,784.30 per ounce.
  • Bitcoin fell 0.7% to $ 57,453.50. (Bitcoin trades 24 hours a day; the prices listed here are at 4 p.m. each trading day.)
  • Difference (GPS) took it to the chin after earnings, with shares down 24.1%. In the third quarter, the clothing retailer reported adjusted earnings of 27 cents per share on $ 3.94 billion in revenue, well below the 50 cents per share and $ 4.43 billion in sales expected by analysts. . GPS also lowered its annual forecast, citing rising freight costs and supply chain disruptions due to plant closures in Vietnam. “In the third quarter, the Athleta and Gap brands continued to be the bright spots for GPS as the brands grew 48% and 8%, respectively, from fiscal 2020,” the analyst said. of CFRA Research Zachary Warring, who maintained his Hold rating on the stock while lowering his price target from $ 8 to $ 22. The company reiterated its plan to open between 30 and 40 Old Navy stores and 20-30 Athleta stores in 2021 while closing 75 Gap and Banana Republic stores. We have to see how sales and margins hold up over the course of the year. ‘fiscal year 2023 to become more optimistic about GPS shares. “
  • Supply chain issues were also noted in Nordstrom (JWN) quarterly update. “As many retailers face macro supply chain disruptions, Rack [the retailer’s off-price chain] faces a unique challenge as the low-cost sourcing of the same big brands that we offer at Nordstrom is particularly difficult in an environment with production constraints and lower levels of clearance products, ”said CEO Erik Nordstrom at of the call for results. While Rack contributed around 50% of total sales in 2019, he added, it has only generated 42% of sales since the start of the year. estimates for a profit of 57 cents a share and revenues of $ 3.5 billion. The stock plunged 29% today.

The advantage of pricing power

Some of the best stocks to buy now are those that are capable of dealing with higher inflation.

The power of pricing should be an important topic for investors when evaluating the relative returns of stocks, say a group of analysts at global research firm UBS, especially given the current environment of ” rising shipping costs, rising raw materials, supply chain issues and accelerating wage growth. “”

The team has been studying the stock market performance of companies with pricing power for some time. They found that stocks of companies that can raise prices without consumers balking and taking their business elsewhere, and that have strong margin dynamics, tend to outperform those without about 20%, on average, over a 12-month period. once inflation exceeds 3% on an annualized basis. .

So if you’re looking for ways to protect your portfolio from rising inflation, consider this list of stocks with a pricing power advantage, according to UBS. Each of these names has a high buyer’s rating from the research firm and ranks in the top third of its industry in terms of pricing power, margin dynamics, and exposure to input costs. .


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