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Day Ahead: Top 3 Things to Watch for Dec. 20

1. Watch the Fed’s Favorite Gauge

There are a couple of indicators that look big on paper tomorrow – GDP and Michigan sentiment -- but they are just updates of previous numbers and not expected to change from the previous estimates.

Instead the market should be looking at the income and spending numbers coming out at 10:00 AM ET (15:00 GMT). And they should be looking at the inflation component.

Personal income is expected to have risen 0.3% in November, while spending is seen rising by 0.4%, according to forecasts compiled by Investing.com. But these numbers also contain the Federal Reserve’s favorite inflation gauge: the personal consumption expenditures index excluding food and energy (core PCE index).

The core PCE came in at a very tame 1.3% year-on-year in October.

3. Carnival Results Cruise Into View

Carnival Corporation (NYSE:CCL) will issue its quarterly numbers ahead of trading tomorrow.

The hospitality company is expected to report a profit of 52 cents per share on revenue of about $4.7 billion.

The stock was downgraded to hold by SunTrust last month, with the analyst noting travel agencies indicated less demand for Carnival vacations relative to its peers.

For the record, third-quarter GDP is expected to remain at its previous measure of an annual rate of 2.1%, while Michigan sentiment is forecast to remain at 99.2.

3. Nike (NYSE:NKE) Beats on Headlines, but Trips up on Margins

Nike (NYSE:NKE) earnings might dent consumer discretionary stocks tomorrow as it failed to impress investors, despite a beat on the top and bottom lines with its latest quarterly results.

The stock fell about 0.8% after hours on concerns about gross margin.

Gross margin came in at 44%. That was below estimates of 44.1%, according to Briefing.com.

The company reported earnings per share of $0.70 on revenue of $10.33 billion. Analysts polled by Investing.com expected EPS of $0.58 on revenue of $10.08 billion. A year ago, Nike (NYSE:NKE) earned 52 cents a share on revenue of $9.37 billion.

The shares hit a 52-week high of $101.27 on Thursday and are up 36.4% for the year.

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