PRISM Insights: This Week’s Wrap Up, Retail Sales Report and What to Expect For the Week Ahead

This past week showcased heightened investor enthusiasm and retail-driven momentum, as evidenced by the largest inflows into U.S. equities since March and the biggest inflows into financials since early 2022, driven by FOMO and “Trump trade” sentiment. Economic data provided further support, with October core CPI coming in slightly below expectations, reinforcing the likelihood of a 25-basis-point rate cut in December. The NY Fed’s survey showed one-year inflation expectations at their lowest since October 2020, paired with an improving labor market outlook, bolstered by initial jobless claims falling to their lowest since May. October retail sales surprised to the upside, and upward revisions to September data highlighted consumer resilience. Empire Manufacturing Survey surged to its highest level since late 2021, while corporate updates such as Cisco’s (CSCO) strong AI-related growth and Disney’s guidance exceeding expectations added to the upbeat sentiment.

October retail sales exceeded expectations, rising 0.4% month-over-month (m/m) versus a forecasted 0.3%, with significant upward revisions to September data (+0.8% from +0.4%) despite challenges from hurricanes and pre-election uncertainty. Gains were notable in electronics (+2.3%), cars and parts (+1.6%), restaurants and bars (+0.7%), and building materials (+0.5%). However, declines were seen in furniture (-1.3%), sporting goods (-1.1%), clothing (-0.2%), and department stores (-0.2%). Sales excluding autos increased 0.1% (below the 0.3% forecast), while control-group sales fell 0.1% against expectations of a 0.3% rise. Analysts acknowledged hawkish implications due to strong revisions but downplayed the report’s impact, emphasizing upcoming November retail sales (17-Dec) and CPI (11-Dec) data ahead of the 18-Dec FOMC rate decision.

Next week is shaping up to be eventful across corporate earnings, economic data, and key industry conferences. Notable earnings releases include Walmart (WMT), Lowe’s (LOW), Medtronic (MDT), Target (TGT), NVIDIA (NVDA), and Palo Alto Networks (PANW), among others. Analyst and investor days are planned for several companies such as Qualcomm (QCOM), Fortinet (FTNT), and Procter & Gamble (PG), while major IPOs from Brazil Potash and Pony AI may price later in the week. The US economic calendar features significant reports including housing starts, jobless claims, and November’s preliminary PMI data. Additionally, a heavy slate of healthcare and brokerage conferences will provide insights into drug developments and guidance updates. This mix of corporate, economic, and conference activity highlights a dynamic week ahead for investors and analysts alike.