Almost two months after saying interest rates were “a long way” from neutral, and causing a communal hand-wringing across Wall Street, Fed Chairman Jerome Powell reversed course today stating that interest rates are “just below…the level that would be neutral for the economy.” The Chairman went on to state that the Fed has “no preset policy path,” and that it is “paying very close attention to what incoming economic and financial data are telling us.” Mr. Powell’s remarks sent the market into rally mode apparently taking off the table one of the major barriers to a higher stock market – an aggressive Fed raising rates on a preset path with no regard to developing data. A rapidly deteriorating housing market, year-over-year numbers released earlier today showed a 12% decline in new home sales, badly missing estimates, likely played a major role in the Fed Chairman’s apparent about face.

Workday (WDAY) reports earnings on Thursday. The HCM (human capital management) software company has been growing rapidly both organically and through acquisitions. Investors will be interested to hear the company’s latest projections on when it will reach positive earnings given its strong revenue growth. Also reporting on Thursday is Abercrombie & Fitch (ANF). The company’s Hollister brand, which had been carrying the water for the stock in recent quarters, did not see the double digit comps investors had come to expect when ANF last reported. While cost cutting has been trending positive, analysts want to see a return to growth for the company’s flagship brand to get the stock back into the $20s. Also reporting numbers on Thursday are Vmware (VMW) and HP Inc. (HPQ).

While the rest of the week’s economic numbers will likely not have the impact of Chairman Powell’s speech Wednesday, there is still a variety of economic data to report. Thursday morning will see the release of jobless claims, personal income and outlays, and pending home sales. Once again the home sales data will be front and center for market analysts. The month-over-month number is expected to come in flat, but after today’s new home sales miss it will not be surprising to see more weakness than expected. We’ll close the economic reporting for November on Friday when Chicago PMI and the Baker-Hughes rig count numbers are released. Analysts will be interested to see if rig counts are still trending higher given the recent collapse in oil prices and reports that both the U.S. and Saudi Arabia are pumping oil at record levels.

Friday investors will comb through earnings from BRP (DOOO) and Fang Holdings (SFUN). BRP, the maker of Sea-Doo personal watercraft and Can-Am bikes, today announced a reorganization of the leadership of the company’s Powersports Group. Analysts will be expecting a rundown of the new team and whether the reorg reflects taking the group in a new direction. Chinese real estate internet portal Fang Holdings has been a disaster for the company’s stockholders in 2018. Investors will want an update on company plans to address the weakness in China and where the company sees the Chinese market heading in 2019.  

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