US stock market’s rally could be put to the test this week if comments from Federal Reserve officials including Janet Yellen add to views the central bank could be scaling back its stimulus plan sooner rather than later.
While this week is light on economic news, bond yields have been rising, giving further credence to the idea the Fed may soon temper its bond-buying programme in the near future.
With less than two months left in the year, many investors are bracing for something that could shake up the stock market and the Standard & Poor’s 500’s 24 per cent year-to-date gain.
That could come from the Fed, even if it’s just that investors begin to anticipate the Fed is ready to make a move soon.
This week brings several speeches by Fed officials, but key will be a hearing on Thursday before the US Senate Banking Committee on the nomination of Fed Vice Chair Yellen to replace Fed Chairman Ben Bernanke.
Federal Reserve Bank of Atlanta President Dennis Lockhart is expected to speak on the economic outlook tomorrow.
This week brings data on industrial output, as well as weekly jobless claims.
Also on the agenda are results from several retailers, with results in the upcoming weeks rounding out the third-quarter earnings season.
Of the 16 S&P 500 companies expected to report, four will be retailers: Macy's, Kohl's, Wal-Mart Stores and Nordstrom.