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Big Week for Fed FOMC and Key Inflation Data

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For the second week in a row, we’re starting a busy week in the stock market rather dormant: there are no major economic prints coming out ahead of the opening bell, and Q3 earnings season is basically over. Pre-market futures are flat — single-digits in the red for the S&P 500 and Nasdaq, single-digits in the green for the blue-chip Dow and small-cap Russell 2000. Month to date, it’s the Russell leading the way, +4.56%, while the Nasdaq lags, +0.35%.

Two big events long circled on our economic calendars are for tomorrow’s Consumer Price Index (CPI) report and Wednesday’s Federal Open Market Committee (FOMC) meeting, which will usher in an update on interest rates, which have stood pat at 5.25-5.50% since the FOMC meeting in late July. Almost certainly, Wednesday will mark the fourth meeting in the last five where the Fed did not make a move on interest rates.

Could Tuesday’s CPI figures (and Wednesday morning’s Producer Price Index [PPI]) augment the Fed’s thinking on changing rates? Nearly completely unlikely. Analysts look for the November Inflation Rate (headline CPI year over year) to come in 20 basis points (bps) lower than October, and the lowest since June 2023’s 3.0%. Core year over year CPI (stripping out volatile food and fuel prices) is expected to remain flat at 4.0%. These figures would be consistent with a steadily cooling economy, which has been the Fed’s plan all along — or at least since it began hiking the Fed funds rate back in March 2022.

Wednesday’s PPI core year over year, by the way, was the first major economic metric to deliver a “2-handle” — October came in at 2.9%. If any of this pricing data suddenly jumps higher, it may mark a change in descriptors from the Fed statement or from Fed Chair Jerome Powell’s press conference Wednesday afternoon, but — especially because pricing data is forecast via certain other monthly economic prints, and we’ve seen no spike in prices anywhere — anything but a flat interest rate decision would be a huge surprise.

Beyond these news events, we still do have a few outlying companies reporting earnings this week, with fiscal calendars not set to the majority: Adobe (ADBE - Free Report) results come out Wednesday afternoon, Costco (COST - Free Report) and Lennar Homes (LEN - Free Report) Thursday, and Olive Garden parent Darden Restaurants (DRI - Free Report) Friday morning. This will basically put a bow on Q3, with better results than expected overall, but with dwindling estimates looking ahead to Q4 numbers early next year.

After today’s close, we’ll see fiscal Q2 earnings results from Casey’s General Stores (CASY - Free Report) , the Iowa-based convenience store with a Zacks Rank #2 (Buy) ahead of its report. Earnings are expected to come in 2 cents below the year-ago quarter to $3.65 per share, while anticipated revenues of $4.15 billion would be +4.3% higher year over year. The company has posted positive earnings surprises in three of the last four quarters.

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