Last week was a great trading week with a lot of range and some high-powered earnings.
Tesla (TSLA) came in with a miss and jumped the next day, while Meta Platforms (META) came in with a beat and dropped almost 80 points after hours only to trade back through most of that range throughout the day. Google (GOOGL) also reported last week and announced its first-ever dividend.
This week's earnings are still a strong theme and in addition Non-Farm Payrolls, JOLTs, and the big one, The Fed Funds rate.
Here are 5 things to watch this week in the Market.
Earnings
There are some big earnings due out this week with Apple (AAPL), Mastercard (MA), and Amazon (AMZN) leading the pack. Additionally, Microstrategy (MSTR) is due out Monday and while this probably won’t be a market mover for the stock market, how this report comes out could have an impact on the crypto markets.
Tuesday Amazon is due out after hours, and this is important for both the insight into consumer spending habits, but also into business spending habits given that cloud infrastructure is such a large portion of their business.
Mastercard is out Wednesday, and this could provide further insight into the overall state of spending in this economy, credit card balances have been reported as being near all-time highs, if they report increasing delinquencies it could show that weakness is starting to hit the consumer. Finally, out on Thursday is Apple. In past quarters this name has had the power to move the entire market depending on how the earnings have been reported. Given that this stock has a high weight in a lot of funds and the indexes in general, it's possible we will see this trend continue.
ISM Manufacturing PMI
PMI has been hovering right around the 50 level for the past several months showing small amounts of contraction and expansion as it bounces above and below this threshold. Given that inflation is back on the Fed's radar, if PMI comes in hot and shows manufacturing is gaining strength, we could see some sell enter the general markets. If we see a miss, we could see the market rally.
Fed Funds/ FOMC
Fed Funds are out this Wednesday and this is almost always a market mover. With inflation starting to be a concern again the rate data could produce a strong move depending on what is said. The Rate itself is expected to stay stable at 5.50% If they come out and do a surprise cut or raise then we could see a strong rally or drop respectively. The real information will more than likely come from the Statement and the Press conference afterward as it will give a better indication of where the Fed sees rates for the rest of the year. If they start to pivot to a more hawkish stance, we could see some selling start to pick up as the market realizes lower rates may not be here this year. If, however, they hold firm on a dovish stance we could see a bid form under the market on hopes that rates start to recede this year.
Non-Farm Payrolls
Non-farm payrolls are due out Friday morning, and the past several months have been some pretty serious beats causing some mixed market movement. If we get a beat again this month, it's possible stocks will drop on continued perceived strength in the economy. One thing to note about these reports, the headline does not always tell the entire story. The prior month's data often gets revised, and it also takes into account part-time employment, which has been on the rise. So looking into the actual report would give a better understanding of the headline data.
Commodities and Currencies
Gold, Oil, and the USDJPY currency pair have all been giving up some of their recent gains. Strong Commodities can put pressure on equities as money starts to get reallocated away from the market. Oil has multiple impacts given that it also causes an increase in fuel prices impacting both consumer goods and transportation. Finally, the USDJPY can have an effect on the treasury market when it is strong, and this can pull liquidity away from the overall market as well. This week it could prove beneficial to watch these commodities and currencies for a possible tell on what we can expect in the near future.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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