Equity markets advanced last week despite another hawkish twist in the FOMC saga. Fed Chief Jerome Powell apparently contradicted his own comments that the peak of the rate hiking cycle was near. He says the committee is not confident it's properly positioned to bring inflation back to the 2% target. In this scenario, the Fed will need to hike rates at least 1 more time to be sure and may need to hike more than once if inflation persists at above-target levels.

This week will bring a host of catalysts for the market including the CPI reading and earnings from retailers. Retailers from Home Depot to Target, Walmart, and TJX Companies are on deck and will give a deep glimpse into the state of the consumer. While spending is expected to remain solid shifts in habits favor Walmart and the off-price retailers. The real question is how the holiday season is shaping up and how much discounting it will take to drive store traffic.