01/12/2022

5 things to know before the stock market opens Monday

Heritage turkeys make rapid gurgling sound at Elmwood Stock Farm ahead of the Thanksgiving holiday in Georgetown, Kentucky, November 16, 2021.

Amira Karaoud | Reuters

Here are the most important news items that investors need to start their trading day:

1. Time to talk turkey

Happy Thanksgiving Week. We may have a shortened trading schedule, with U.S. markets closed Thursday for the holiday and only open until 1 p.m. ET Friday, but there’s no shortage of intrigue. Equities slumped a bit last week, but closed strong Friday as investors weighed a vareity of retailer earnings (more on that below) and a new round of Fed speak as Federal Reserve officials largely stuck to their plans to raise rates to bring down inflation. Some market watchers think a bottom could be near. “The final move of the bear market probably comes next year in the first quarter, when the earnings finally catch up to where we think they’re going to be next year,” Mike Wilson, Morgan Stanley’s Chief U.S. Equity strategist, told CNBC. Read live market updates here.

2. Disney’s Sunday night shocker

Bob Iger, left, and Bob Chapek of Disney

Charley Gallay | Getty Images; Patrick T. Fallon | Bloomberg | Getty Images

Sorry, HBO. Disney‘s “House of the Mouse” might have the edge over “House of the Dragon” for sheer intrigue and shock value. The Walt Disney Company stunned the business world Sunday night with the news that it had again hired Bob Iger to be chief executive, pushing out Bob Chapek, who had succeeded Iger in the role less than three years ago. Disney’s stock rose after the announcement. Criticism of Chapek had grown to a fever pitch as Disney’s share price fell 40% this year after hitting dramatic highs last year. The CEO switch came less than two weeks after Disney posted weak fiscal fourth-quarter earnings as well as Chapek’s internal announcement that the company would freeze hiring in some segments, trim costs companywide and cut some jobs. Iger’s return, however, calls into question every decision Chapek made during his brief tenure at the helm of Disney, writes CNBC’s Alex Sherman.

3. Another big retail week

Televisions are seen for sale at a Best Buy store in New York City.

Andrew Kelly | Reuters

It may be a short week for Wall Street, but it’s still jam-packed for retailers. Best Buy, Nordstrom, Dollar Tree and Dick’s all report quarterly earnings Tuesday, and, of course, Friday is Black Friday, traditionally a huge driver of sales for stores. Investors are looking for what retailers will say about consumer buying habits heading into the holiday shopping season. Last week, Macy’s and Target said they saw a slowdown in sales at the end of October and into the beginning of November, so we will be watching for similar updates from this week’s reports. Investors will also be interested in retailers’ progress getting rid of excess inventory, especially since Black Friday deals have effectively been under way since last month.

Read more from CNBC PRO: Holiday shoppers aren’t in a rush. What that means for retail stocks

4. Countries reach big climate deal

Around 35,000 delegates from nearly 200 countries are expected to convene in the Red Sea resort town of Sharm el-Sheikh to discuss collective action to tackle the climate emergency.

Ahmad Gharabli | Afp | Getty Images

Officials from nearly 200 countries agreed to create a new fund to pay poor nations over the damages they experience from climate change. The deal came at the COP27 conference in Egypt. Nations also agreed to stick with their goal to keep the global temperature increase to the threshold of 1.5 degrees Celsius above pre-industrial period levels. The agreement also drew some criticism. “COP27 has kept alive the goal of 1.5C. Unfortunately however, it has not delivered on a commitment by the world’s major emitters to phase down fossil fuels, nor new commitments on climate mitigation,” European Commission President Ursula von der Leyen said in a statement.

5. Speaking of fossil fuels

Luke Sharrett | Bloomberg | Getty Images

Goldman Sachs cut its price forecast for crude oil in the fourth quarter, pointing to potential slowdowns coming from Covid outbreaks in China and uncertainty over the G-7’s plans to put a cap on Russian oil prices as the Kremlin presses its war in Ukraine. Goldman now expects $100 a barrel, down $10 from its previous forecast. “Investors have been left disappointed by higher than expected production and export flows from Russia. This is despite just two weeks remaining before the EU embargo takes effect on crude, alongside the G-7 price cap, for which more details are set to be announced next week,” Goldman said in a note. WTI crude was trading below $80 on Monday morning.

– CNBC’s Tanaya Macheel, Alex Sherman, Melissa Repko, Sam Meredith and Lee Ying Shan contributed to this report.

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