Dow has worst week since September as investors look ahead to CPI, Fed meeting

Published Fri, Dec 9 20224:22 PM EST

It was a whipsaw week for stocks. The market came under pressure early in the week as investors worried that elevated wage pressure seen in the November jobs report could push the Federal Reserve to raise interest rates to a higher level than expected next year to combat inflation. After a brief mid-week respite, Wall Street closed lower Friday. The Dow Jones Industrial Average had its worst week since September. After a hotter-than-expected November reading on producer prices, investors and the Fed will look for more clarity around the inflation picture Tuesday when the government releases its consumer price index for last month. The next day, Fed Chair Jerome Powell is set to announce a decision on the next stage of rate hikes. The current expectation is that the central bank's decision-making body will increase rates by 50 basis points, representing a slight downshift after four consecutive increases of 75 basis points each. But what's still a question mark is how high the Fed will take rates up, and for how long, given the current economic slowdown. While there are still plenty of unknowns regarding the Fed's policies, which it says are data-dependent, we'll get an updated read into how members of the Federal Open Markets Committee (FOMC) are thinking about rate hikes into 2023. The Club will be looking to see any signals on how the Fed views real gross domestic product (GDP), the unemployment rate, and core inflation faring next year. This past week, defensive sectors like utilities and healthcare outperformed, with real estate also faring better. Energy led the way to the downside, followed by communication services and consumer discretionary. Meanwhile, the U.S. dollar index increased slightly but is still below 105. Gold closed the week at around $1,810 per ounce. West Texas Intermediate crude oil fell from around $80 per barrel to the low $70s, as the market grew concerned about the outlook of the global economy. The yield on the 10-Year Treasury moved higher this week amid renewed expectations the Fed will need to raise interest rates higher than expected. Looking back Within the portfolio, we had quarterly earnings results from Costco Wholesale (COST) on Thursday evening. The wholesale retailer reported a mixed quarter . There were two key economic reports on Monday: New orders for U.S. manufactured goods increased by 1% in October. This was higher than the market expectation of a 0.7% gain and follows an uptick of 0.3% in the prior month. The ISM purchasing manager's index (PMI) increased to 56.5 in November. This figure was higher than expectations of 53.3 and represents a big jump from the 2-year low of 54.4 recorded in October. On Thursday, the Labor Department said initial jobless claims for the week ending Dec. 3 were 230,000, an increase of 4,000 from the prior week and in line with analysts' forecasts. Lastly, on Friday, the Labor Department released its monthly producer price index, which as mentioned above showed wholesale prices increased more than expected in November. The index climbed 0.3% for the month, ahead of analysts' forecasts for a 0.2% gain. What's ahead There's only a handful of earning reports left between now and the end of the year. No Club holdings are scheduled to report next week, but Eli Lilly (LLY) will be holding a 2023 guidance call at 9 a.m. ET on Tuesday. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, December 12 After the bell: Oracle (ORCL), Coupa Software (COUP) Tuesday, December 13 8:30 a.m. ET: Consumer price index FOMC meeting begins Wednesday, December 14 After the bell: Lennar (LEN), Trip.com (TCOM) FOMC meeting ends; rate decision at 2 p.m. ET followed by Powell news conference Thursday, December 15 Before the bell: Jabil (JBL) After the bell: Adobe (ABDE) 8:30 a.m. ET: Initial jobless claims 8:30 a.m. ET: Retail sales 9:15 a.m. ET: Industrial production Friday, December 16 Before the bell: Accenture (ACN), Darden Restaurants, Winnebago (WGO) 9 a.m. ET: Markit PMI manufacturing (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.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference on May 1, 2019 in Washington, DC.

Mark Wilson | Getty

It was a whipsaw week for stocks.

The market came under pressure early in the week as investors worried that elevated wage pressure seen in the November jobs report could push the Federal Reserve to raise interest rates to a higher level than expected next year to combat inflation. After a brief mid-week respite, Wall Street closed lower Friday. The Dow Jones Industrial Average had its worst week since September.