By Liz Moyer

Investing.com -- Stocks extended their losses heading into the close of trading on Monday as investors tried to shake off fears about a recession in the new year.

Already, the Federal Reserve has signaled it intends to keep interest rates high through 2023, rather than the hoped-for pause or pivot. The Fed even said its target policy rate could reach above 5%, which is higher than people expected just a few weeks ago. But the Fed is determined to tame inflation, and investors are worried that it could overshoot the mark and tip the economy into a recession.

Fed officials see gross domestic product growing at a slower rate next year than they did at their September meeting. Unemployment is also expected to rise despite signs the labor market is still tight.

This week will bring a handful of big company earnings plus a smattering of economic data. Housing starts are expected to cool slightly in November from the prior month as rising interest rates keep home buyers on the sidelines. Later in the week, data on personal income and spending is expected to slow from the prior month and consumer sentiment is expected to remain the same from the previous reading.

Here are three things that could affect markets tomorrow:

1. Nike earnings

Athletic apparel maker Nike Inc (NYSE: NKE) is expected to report earnings of 65 cents on revenue of $12.58 billion.

2. General Mills results

Cereal and packaged food maker General Mills Inc (NYSE: GIS) is expected to report earnings of $1.06 on revenue of $5.18B. Analysts will be listening to both reports for updates on supply chains and labor trends.

3. Housing starts

Data on housing starts is expected out at 8:30 ET (13:30 GMT). Analysts expect a reading of 1.4 million on an annualized basis, which would be slightly below the 1.425 million in the prior month.