Nike and FedEx earnings, PCE index: What to watch this week

The Fed's preferred inflation measure, the personal consumption expenditures index, will put recent market optimism to the test. On the corporate side, investors will get another look at the health of the consumer when Nike (NKE) reports fiscal 2024 first quarter results this week, along with quarterly reports from Carnival (CCL) and FedEx (FDX).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video transcript

BRAD SMITH: It's the last full week of the year. And investors have a few more big data points to watch before the holidays. Joining us now with what we should be paying close attention to this week. We've got Yahoo Finance's reporter, Josh Schafer. Josh, how excited should we be on this pre-cheer week?

JOSH SCHAFER: Always excited, Brad.

BRAD SMITH: Always excited.

JOSH SCHAFER: Stocks are near all time highs. Got to be excited. Got to be excited.

SEANA SMITH: And a week till Christmas.

JOSH SCHAFER: And we got some earnings to run through this week.

BRAD SMITH: Holiday cheer? Yeah.

JOSH SCHAFER: There's plenty to cover this week, which keeps us excited when you take a look at that earnings calendar, right? Several big companies reporting earnings ahead of that holiday shortened week next week. So you see there you got FedEx tomorrow, General Mills, Nike, Carnival. And my big takeaway here, when you zoom out and think about all of those companies, it's another look at the consumer, right? And specifically, when you think about Nike and when that quarter ends, we're going to get Nike's report through the end of November.

So we're going to get part of those holiday sales, right? We're going to understand how Nike started the holiday season and then also get their outlook for what they expect overall through the holiday season. Analysts projecting through that right now. Think they are going to see a little bit slower demand in North America, so it will just be interesting I think overall to start to understand the holiday picture. And if people like Brad kept buying Jordans for Christmas.

SEANA SMITH: Always.

BRAD SMITH: I hit-- I got one of them. yeah.

[LAUGHTER]

[INTERPOSING VOICES]

SEANA SMITH: I mean, one of your weekly checks at Foot Locker.

BRAD SMITH: I mean, it's great when you see that sneakers, the Gotham thing come up after you finally hit on a pair after missing for like-- I don't know, taking 1,200 L's out here.

SEANA SMITH: Well, we know. We talk, I guess, inflation maybe, it might have been impacting your personal spending a little bit. But when it comes to these retailers, that's clearly been a headwind, right, Josh?

JOSH SCHAFER: Yeah.

SEANA SMITH: We've seen some improvement. Powell is optimistic. Maybe about the headway that we've made we're going to get another reading on it on Friday.

JOSH SCHAFER: Another print on Friday. And that's a very important print when again, as you were just mentioning, Seana, when you really think about the market narrative here and why we've been rallying over the last month and a half here. It's been on inflation. It's actually falling faster than people think. And the Fed bringing that as a welcome sign. So do we see that continuing on Friday? And really what we're looking for on Friday in this November PCE report, we're looking at core PCE, which excludes volatile categories of food and energy.

And you can see on your screen there. We're expecting month over month, a 2% increase in core. 3.4%, year over year. And it just sort of tie this together to some of the other things we're tracking in the market overall. Goldman Sachs just moved up their S&P 500 forecast over the weekend to 5,100. Key to that call was their economists thinking rate cuts are going to come sooner than expected. Why are rate cuts coming sooner than expected? Because inflation is falling faster than we previously thought. So Friday, really, when you think about it, I don't know if you're necessarily going to see some big market rally if inflation comes in at these expectation numbers.

But we're now getting to the point where people are expecting inflation to fall on this nice path, right? So you need to see these things come in line for us to meet the expectations we have set, because it feels like those expectations have been getting higher, right? A little bit harder to meet by the day.

SEANA SMITH: They haven't. We were talking to a strategist at the top of the hour who has a 5,500 target for the S&P at year-end 2024. Talking about the optimism that's playing out, so it could either meet those expectations. Or on the flip side, be a big disappointment if we do see a hotter than expected print, right, Josh? Thanks.

JOSH SCHAFER: 5,500 holiday cheer.