How high can the market go?

What impact did the week have on the market?

• Downward trajectory:

After posting fractional gains the previous two weeks, the S&P 500 fell more than 2% for its fifth negative result out of the past seven weeks. The NASDAQ and the Dow also posted weekly declines as investors focused on earnings results and bond market volatility.

After recovering modestly the previous week, prices of government bonds resumed their recent slide, briefly sending the yield of the 10-year U.S. Treasury up to 5.00% on Thursday—the highest since 2007. While the 10-year yield slipped back below that threshold on Friday, the yields of 2-year and 30-year Treasuries both ended the week around 5.08%.

Source: The Market Watch

• Retail therapy:

The surprising strength of the latest monthly report on U.S. retail sales provided further evidence of consumer spending resilience. Sales rose 0.7% in September relative to the previous month—far exceeding most economists’ expectations—and data for August was revised higher to show sales advancing 0.8%.

Source: The Motley Fool

• FED Rate Outlook:

Bond yields rose and stocks fell on Thursday afternoon following a speech by Jerome Powell. The U.S. Federal Reserve chair signaled that the central bank could keep interest rates unchanged at its next policy meeting that ends on November 1. However, he also warned that inflation is still too high, and he said that more rate hikes are still possible if economic data continues to come in stronger than expected.

Source: Seeking Alpha

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What to expect for the markets next week?

• U.S. economic checkup: The U.S. government on Thursday is scheduled to release its initial estimate of third-quarter economic growth, with most economists expecting that GDP growth remain solidly positive, despite some earlier predictions that the economy could be on the verge of a recession. The upcoming report comes a month after the government revised its second-quarter GDP estimate to an annual growth rate of 2.1%, down from 2.2% in the first quarter.????

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• More Earnings: Tech giants Microsoft, Meta Platforms, Amazon, and Google-parent Alphabet report earnings next week.

Other prominent companies such as Visa, Mastercard, Verizon, Boeing, GE, Ford, General Motors, Spotify, Snap, IBM, Intel, ExxonMobil, and Chevron will also report earnings.