On Tuesday, Jerome Powell, the head of the Federal Reserve, will deliver a speech at the Economic Club of Washington, D.C.
This week’s main earnings calendar event will be Disney’s first report since Bob Iger took over as CEO, Robinhood (HOOD), Uber (UBER), and Pinterest (PINS).
While investors continue to sort through a deluge of corporate financial data, the current stock market bounce and whether the momentum will last into February will be the main focus of the coming week.
In the next few days, Wall Street will see a slowdown in economic activity but a flurry of earnings reports from notable businesses like Walt Disney (DIS), Robinhood (HOOD), Uber (UBER), and Pinterest (PINS).
In this first week of February, there aren’t many official data releases scheduled, but Jerome Powell’s speech will be the week’s high point on the economic front.
At the Economic Club of Washington, D.C., on Tuesday, the billionaire founder of the Carlyle Group, David Rubenstein is expected to interview Powell.
Federal Reserve (Fed) policy can have a significant impact on financial markets, as the central bank uses various tools to manage the economy, interest rates, and money supply.
US Stock Markets React
U.S. equities fell on Friday after startling January employment data revealed that payrolls increased by more than 500,000 in the previous month, dimming hopes for an impending Fed pause on rate hikes, which was a major driver of January’s gain.
Last month, the U.S. economy added 517,000 jobs, far above economists’ predictions of 188,000, and the unemployment rate dropped to 3.4%, the lowest level since 1969.
The S&P 500 and Nasdaq Composite both ended the week higher, up 1.6% and 3.3%, respectively, despite Friday’s losses.
The Dow finished the previous five trading days down 0.2%, failing to post a weekly gain.
With the market’s pricing in rate reduction this year and a recent delay in the Federal Reserve’s downshift to lower rate hikes, equity markets have been on a winning streak to start 2023.
As of Friday’s closing, the S&P 500 is up 7.7% for the year, the Nasdaq is up 14.7%, and the Dow is up 2.4%.
S&P 500 (^GSPC) YTD
Several strategists have voiced skepticism regarding the current rally.
Mike Wilson, the top equity analyst at Morgan Stanley and a well-known stock market bear, attributed recent gains to the January Effect, a market theory that holds that securities’ prices increase in the month of January more than any other month after a year-end sell-off for tax purposes.
Wilson made this statement last week at the iConnections Global Alts Conference in Miami.
As a forex trader, it can be beneficial to monitor and consider the opinions of financial analysts and market commentators.
Analysts provide insights and analysis into market trends, economic indicators, and monetary policy decisions that can impact currency exchange rates.
In its eighth rate increase of the current tightening cycle, the U.S. central bank increased its benchmark policy rate by 25 basis points on Wednesday, indicating “ongoing increases in the target range.”
Markets applauded Chair Powell’s remark that there were indications of “disinflation” in the economy despite that nudge.
The S&P 500 rose roughly 2.4% from the start of Powell’s press conference, while the 2-year yield decreased by about 14 basis points, sending a clear dovish signal to the financial markets.
The key question for the markets going forward is whether Powell’s dovishness was unintentional or not. Powell’s speech at the Economic Club this week might take a more hawkish stance.
It was never going to be easy for Powell to convey a hawkish message after slowing the pace of rises for the second time in as many meetings, according to analysts who believe the Fed’s embrace of disinflation is genuine.
No significant reports are expected to be released on Monday.
Tuesday: Consumer Credit, December ($25.000 billion projected, $27.962 billion during prior month); Trade Balance, December (-$68.5 billion predicted, -$61.5 billion during prior month, revised to -$90.2 billion).
Wednesday: Wholesale Trade Sales, month-over-month, November (0.4% during prior month); MBA Mortgage Applications, week ending February 3 (-9.0% during previous week); Wholesale Inventories, month-over-month, November Final (1.0% predicted, 1.0% during previous month).
Thursday: Continuing claims, week ended January 28 (1.660 million expected, 1.655 million during prior week); Initial claims, week ending February 4 (190,000 predicted, 183,000 for the prior week).
Friday: Monthly Budget Statement, January (-$42.0 billion, -$85.0 billion); the University of Michigan Sentiment, February Preliminary (65.0 predicted, 64.9 prior reading).
An economic calendar is a tool that provides information on upcoming economic events and data releases, such as interest rate decisions, GDP figures, and employment data, that can have an impact on currency exchange rates.
In terms of earnings, profits have been below average halfway through the seasons.
Over the last week, the proportion of S&P 500 businesses reporting positive earnings surprises stayed constant, but the size of these shocks shrank, primarily due to the underwhelming performance of Megacap technology titans.
As a result, today’s fourth-quarter earnings decline is greater than it was at the end of the previous week and at the conclusion of the quarter.
If the index actually announces lower earnings for Q4 2022, it will be the first time since Q3 2020 that the index has recorded earnings that are lower year over year.
This week’s main earnings calendar event will be Disney’s reports.
This will be Disney’s first earnings report since former CEO Bob Chapek was fired and Bob Iger took over as CEO.
Iger is under pressure to demonstrate that he has the best strategies for promoting growth. This is especially true in the streaming industry, where concerns about extravagant spending and future demand are top of mind.
Currently, consumer spending is holding up better than anticipated in some areas, so despite difficult economic conditions, we have confidence that Disney+ will deliver on subscriber growth, especially in light of Netflix’s better-than-expected quarter.
An earnings calendar is a schedule of publicly traded companies’ earnings releases, usually reported on a quarterly basis.
An earnings calendar provides information on the dates that companies will release their financial results, including revenue, profit, and earnings per share (EPS) data.
Here are the top expected earnings reports for this week;
Activision Blizzard (ATVI), Chegg (CHGG), Cummins (CMI), ON Semiconductor (ON), Pinterest (PINS), Simon Property Group (SPG), Spirit Airlines (SAVE), Take-Two Interactive Software (TTWO), and Tyson Foods were among the companies whose stock prices rose on Monday (TSN)
Assurant (AIZ), BP (BP), Chipotle Mexican Grill (CMG), DuPont (DD), Fortinet (FTNT), H&R Block (HRB), Hertz Global (HTZ), KKR (KKR), Prudential (PRU), Royal Caribbean (RCL), V.F. Corp (VFC), and Western Union were among the companies whose shares traded on Tuesday (WU)
On Wednesday, the following stocks were listed: Affirm (AFRM), AllianceBernstein (AB), CME Group (CME), Coty (COTY), CVS Health (CVS), Dominion Energy (D), Equifax (EFX), Fox Corporation (FOXA), Goodyear Tire (GT), Hillenbrand (HI), Mattel (MAT), MGM Resorts (MGM), New York Times (NYT), Penske Auto (PAG), Robinhood Markets (HOOD), So (YUM).
The following companies reported their results on Thursday: AbbVie (ABBV), Apollo Global Management (APO), AstraZeneca (AZNL), Brookfield Asset Management (BAM), Canopy Growth (CGC), Duke Energy (DUK), Expedia Group (EXPE), Hilton (HLT), Kellogg (K), Lyft (LYFT), News Corp. (NWSA), PayPal (PYPL), PepsiCo (PEP), Philip Morris International (PM) (YELP)
Friday: Spectrum Brands and Newell Brands (NWL) (SPB)
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