This week was yet another week of unprecedented green in the markets, with the Nasdaq and the Russell 2000 up over 4% week over week, the S&P up nearly 2%, and the Dow roughly flat. The market remained fairly flat until the Fed came out with its most recent rate hike, signaling that we’ve only got a few rate hikes left. This along with the fact that big tech largely met earnings expectations, fueled a rally the likes of which we haven’t seen in months. However, on Friday, employment numbers were much hotter than expected, seriously putting a damper on the rally.
Last week the Fed raised interest rates by 25 basis points, which was exactly what the market was expecting. However, when Jerome Powell spoke, he signaled that rates would only have to be hiked a couple more times before the Fed could take its foot off the gas. This, of course, led to tremendous green in the markets.
Unfortunately, on Friday, the number of nonfarm payrolls added nearly tripled expectations, coming in at 517,000 vs. 187,000 expected. In addition, the unemployment rate came in at 3.4%, the lowest it’s been since 1969. This bad news in the job market led the stock market to sell off in a major way, out of fear that the Fed would have to rescind their statements.
After the past week, it seems that we’ve made it out of the woods for now. This week does not have many consequential economic data or earnings releases. However, it’s probably worth paying attention to the consumer credit data release on Tuesday, as well as the consumer sentiment index data on Friday. These are important metrics that show how the consumer is faring. After all, if we are going to make it out of these turbulent economic times, we’ll need a strong consumer to do so!
Although many of the largest companies in the world have already reported their earnings, we’ve still got quite a few companies releasing earnings this week:
02/06 – Activision Blizzard (ATVI), Simon Property Group (SPG), Tyson Foods (TSN), Pinterest (PINS), Skyworks Solutions (SWKS)
02/07 – Linde plc (LIN), BP plc (BP), Chipotle Mexican Group (CMG), Carrier Global (CARR)
02/08 – The Walt Disney Company (DIS), Toyota Motor Corp (TM), CVS Health Corporation (CVS), Uber Technologies (UBER), O’Reilly Automotive (ORLY), Yum! Brands (YUM)
02/09 – AbbVie Inc. (ABBV), Pepsico (PEP), AstraZeneca PLC (AZN), Phillip Morris (PM), S&P Global (SPGI), PayPal Holdings (PYPL), Hilton Worldwide Holdings (HLT)
02/10 – British American Tobacco PLC, Honda Motor Company (HMC), Mettler-Toledo International (MTD), Polestar Automotive (PSNY)
This week, we’ve got quite a few vehicle-related companies reporting earnings, such as TM , ORLY, HMC, and PSNY. They will undoubtedly provide insight on the new vehicle market as well as how the used market is affecting sales. This will be important to hear, as supply chain problems and inflation have hit the car market particularly hard.
We’ll also hear from mid-sized tech companies, like PYPL, UBER, and PINS. Although they will likely echo what we’ve heard over the past week or two, it’ll still be important to pay attention to how their individual businesses are faring.
Lastly, some very important entertainment companies, such as ATVI and DIS will be reporting this week as well. These entertainment juggernauts will provide important commentary around how their businesses are performing, which will undoubtedly move their competitors’ share prices in a major way as well!
Monitoring the market conditions this week.
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