Wall Street had its best session in weeks Monday but closed lower for the week. The usual suspects were to blame — rising bond yields, geopolitical tensions, and oil prices — and will hold the keys to the market this coming week. The Dow Jones Industrial Average , the S & P 500 and the Nasdaq saw weekly declines of 1.6%, roughly 2.4% and about 3.2%, respectively. The S & P 500 remained up 10% year to date. .SPX YTD mountain S & P 500 year-to-date performance Federal Reserve Chairman Jerome Powell on Thursday reiterated his view on monetary policy, saying inflation remains elevated despite some signs of cooling. He said that lower economic growth is likely needed to bring price pressures down, fueling the higher-interest-rates-for-longer trade as recent economic data has been more durable than expected. Following Powell’s speech to the Economic Club of New York, the 10-year Treasury yield topped 5% for the first time since July 2007. Yields pulled back a bit Friday. West Texas Intermediate crude, the U.S. benchmark, topped $90 per barrel on Friday before settling a bit before that level. Jim Cramer has been saying recently that stocks should not be taking their cues blindly from bonds and that the old paradigm of an inverted yield curve signaling a future recession is disconnected from what companies are saying about their businesses. Jim does not see an economic recession ahead. Of the 17% of the S & P 500 companies that have reported, earnings are up 7% and revenue is up 6.2% over the year-ago third quarter. The blended numbers, which include the companies that have reported and estimates for those that haven’t yet, show more modest growth. The Club put its money where its mouth is, buying more shares of Morgan Stanley (MS) on Wednesday’s steep decline. In fact, on Friday we said we would be looking to buy more if investors dump the stock again. The company’s better-than-expected earnings and revenue in the third quarter on Wednesday were overshadowed by softer wealth management activity and the continued investment banking deep freeze. We lowered our price target . The stock fell Thursday and bounced a bit Friday. On the flip side, Procter & Gamble (PG) on Wednesday issued a great quarter , flexing its pricing power. The stock jumped 2.5% that day. It was modestly slower Thursday and Friday. Earnings are one of the three major themes on the marquee next week, with 10 Club companies reporting. Data on U.S. economic growth and the Fed’s favorite inflation index as well as the glide path for bond yields and oil prices are also front and center for investors. 1. Nearly 28% of our portfolio , representing six out of the 11 S & P 500 sectors , is set to report quarterly results in the coming week. Here are the companies: Danaher (DHR), Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), Veralto (VLTO), Honeywell (HON), Linde (LIN), Amazon (AMZN), Ford (F) and Stanley Black & Decker (SWK). Danaher transformed itself into a pure-play life sciences company after spinning off its water and packaging business Veralto into a separate company earlier this month. We kept Veralto, which operates in the Industrials sector. Shares of Danaher are down more than 20% year to date compared to the S & P 500 Health Care sector 5.5% drop in 2023. Veralto shares, which were greeted with selling, are so new to the market that it’s a tough comparison to the Industrials sector, which just about flat year to date. The Club is holding our Veralto shares. Microsoft’s year-to-date gain of more than 35% pretty much matches the performance of the overall Information Technology sector. The artificial intelligence trade has been driving Microsoft and many of its peers higher. Not only is the company the backer of OpenAI, the startup behind ChatGPT, but it’s also infusing AI into its Bing search engine and Office 365 productivity software. Alphabet and Meta Platforms — up more than 50% and 150%, respectively — are both outpacing the Communications Services sector’s over 40% advance in 2023. The power of leveraging AI for advertising is helping both companies. Alphabet has also souped up Google Search with its Bard AI. Shares of Meta, in particular, have really soared over the past 10 months as Wall Street rewards CEO Mark Zuckerberg for his year of efficiency. Honeywell shares have been struggling this year, dropping about 15% and underperforming the Industrials sector’s flat 2023. We’re willing to give new CEO Vimal Kapur time to make his mark on the firm. He started by realigning its businesses just about a week ago. Honeywell also reaffirmed forward guidance. Stanley Black & Decker, also an industrial company, gained more than 3.5% year to date. We’re in this one as a turnaround, which has been progressing. Industrials gas powerhouse Linde has been a steady performer this year, gaining more than 12.5% compared the Materials sector’s over 2.5% drop in 2023. Linde has pricing power and exposure to high-quality end markets such as health care, semiconductors and clean energy initiatives. Amazon and Ford are both are part of the Consumer Discretionary sector, which has gained 19% year to date. Amazon is of course the world leader in online retail. But it also derives a significant portion of its revenue from its cloud unit. Like Meta, Amazon has embarked on cost-savings. Jim has expressed confidence in Ford CEO Jim Farley but recognizes that the United Auto Workers’ strike is taking a toll. Ford has been trying to ramp up its electric vehicle business. 2. The big question is whether the Fed will increase rates one more time this year. The market doesn’t think it will happen, but some Fed members have said one more may be necessary. Two data points coming next week could help us with that answer. The government this coming Thursday releases its first look at third-quarter gross domestic product (GDP), the broadest look at economic growth in America. The Atlanta Fed’s GDPNow tracker moved higher from last week after September retail sales came in stronger than expected this past Tuesday. The Q3 consensus estimate of Wall Street economists by FactSet is calling for 3.6% month-over-month growth and a 2.4% gain year over year. Friday brings the Fed’s gold-standard inflation gauge: the core personal consumption expenditures (PCE) price index. September’s core PCE, which excludes energy and food prices, is seen rising 3.7% year over year. Powell last Thursday said the Fed is committed to getting inflation down to its 2% target. 3. The Fed is not the only factor driving bonds. US10Y 1M mountain 10-year Treasury yield 1-month performance Historically, geopolitical unrest, such as the Israeli-Hamas war, would spark a flight-to-safety trade —bond buying which would cause yields to drop. Remember, bond prices move in opposite directions to yields. However, uncertainty about the Fed and reports of massive Chinese selling of bonds have been keeping yields firm. The longer end of the yield curve has recently been moving higher at a faster clip than the shorter end, narrowing the 2-year/10-year inversion. Normally, shorter-duration bond yields are lower than longer-dated ones. @CL.1 1M mountain WTI 1-month performance Concerns about a wider Mideast conflict have led to worries about crude output disruption coming out of that oil-rich part of the world, which has sent WTI and the international benchmark, Brent crude, higher. A temporary lifting of U.S. sanctions on OPEC member Venezuela is not expected to bring that much supply to the oil market to make much of a difference. Likewise, the U.S. government’s plan to buy 6 million barrels of oil in next month and in January to refill the nation’s Strategic Petroleum Reserve won’t move the needle much either. Here’s the full rundown of all the important domestic data in the week ahead as we consider our next moves for the portfolio. Monday, Oct. 23 After the bell earnings: Cleveland-Cliffs (CLF), Logitech (LOGI) Tuesday, Oct. 24 Before the bell earnings: Danaher (DHR), Coca-Cola (KO), Verizon (VZ), General Electric (GE), RTX Corporation (RTX), 3M (MMM), Halliburton (HAL), PulteGroup (PHM), General Motors (GM), Dow Chemical (DOW), Nucor (NUE), Xerox (XRX) After the bell: Microsoft (MSFT), Alphabet (GOOGL), Snap (SNAP), Visa (V), Texas Instruments (TXN), F5 Networks (FFIV), WM (WM) Wednesday, Oct. 25 10 a.m. ET: New home sales (September) Before the bell: Boeing (BA), Thermo Fisher Scientific (TMO), T-Mobile US (TMUS), Hilton (HLT), General Dynamics (GD), Fortive (FTV), Norfolk Southern (NSC), Imax (IMAX), Otis Worldwide (OTIS) After the bell: Meta Platforms (META), Veralto (VLTO), IBM (IBM), ServiceNow (NOW), KLA (KLAC), O’Reilly Automotive (ORLY), Baker Hughes (BKR), Edwards Lifesciences (EW), Mattel (MAT), Whirlpool (WHR) Thursday, Oct. 26 8:30 a.m. ET: Jobless Claims (week ended Oct. 21) 8:30 a.m. ET: Gross domestic product (Q3 first estimate) 8:30 a.m. ET: Durable goods orders (September) 8:30 a.m. ET: Wholesale inventories (September) 10 a.m. ET: Pending home sales (September) Before the bell: Honeywell (HON), Linde (LIN), Royal Caribbean Cruises (RCL), Hershey Company (HSY), United Parcel Service (UPS), Southwest Airlines (LUV), Altria Group (MO), Northrop Grumman (NOC), Valero Energy Corp. (VLO), Mastercard (MA), Merck & Co. (MRK), Bristol-Myers Squibb (BMY), Newmont Mining (NEM), Tractor Supply Company (TSCO), Comcast (CMCSA), Mobileye (MBLY), Seagate Technology (STX), Boston Scientific (BSX), Hertz (HTZ), Carrier (CARR), Hasbro (HAS), Harley-Davidson (HOG), Keurig Dr Pepper (KDP), Overstock.com (OSTK), PG & E (PCG), Brunswick (BC), Kenvue (KVUE), Oshkosh (OSK), International Paper (IP) After the bell: Amazon (AMZN), Ford (F), Intel (INTC), Chipotle Mexican Grill (CMG), Skechers (SKX), United States Steel (X), Capital One (COF), L3Harris (LHX), Deckers Brands (DECK), Boston Beer Company (SAM), Texas Roadhouse (TXRH) Friday, Oct. 27 8:30 a.m. ET: Personal income & spending (September) 8:30 a.m. ET: Core PCE price Index (September) 10 a.m. ET: University of Michigan consumer sentiment (October final) Before the bell: Stanley Black & Decker (SWK), Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX), Charter Communications (CHTR), Phillips 66 (PSX), AutoNation (AN), Colgate-Palmolive (CL), Newell Brands (NWL), Sanofi (SNY), LyondellBasell (LYB) All day: Monthly auto sales (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Traders work on the floor of the New York Stock Exchange during afternoon trading in New York City on Sept. 26, 2023.
Michael M. Santiago | Getty Images News | Getty Images
Wall Street had its best session in weeks Monday but closed lower for the week.
The usual suspects were to blame — rising bond yields, geopolitical tensions, and oil prices — and will hold the keys to the market this coming week.