Telsa (TSLA) and Netflix (NFLX) looked like they were the shining stars of earnings last week, but we still felt a sell-off in the back half of the week. Tesla ended the week down 7.59% erasing the modest gains it had to start the week off. Even with a pretty solid down move on Thursday, the S&P 500 ($SPX) (SPY) managed to stay green on the week and closed 0.65% higher on the week. With it being a fairly light news week last week's earnings did most of the heavy lifting.
This week looks like it will be a little more exciting. We have PMI, the FED, and a plethora of other items, there could be a bit more volatility this week. Now toss in the continued earnings calls and things could get really fun. Here are 5 things to watch in the market this week.
Earnings
This is going to be a theme for the foreseeable future. And outside of the real big boys, earnings are mostly a stock-specific risk. Keeping an eye on what you trade and when they report could help keep you out of trouble. That said we do have some potential market movers reporting this week with Microsoft (MSFT), Alphabet (GOOGL), and Visa (V) reporting on Tuesday after the close. Meta Platforms (META) is Wednesday and Amazon (AMZN) is Thursday. These are all weighted highly enough to move the general market and general consensus.
Flash PMI
On the news front, we have Flash Manufacturing and Servies PMI coming out Monday at 9:45am Eastern. While two reports, these are a gauge of expansion and contraction in their respective sectors. If these come in below 50, they are contracting, if they come in below their estimates. Usually, this is a forward-looking indicator fo economic health. With the FED actively working to cool things down, it's possible that a miss is seen as positive by the markets, especially with the FED on tap later this week.
FOMC
The FOMC Statement and FED funds rate is out Wednesday at its usual time (2:00 pm Eastern). The market is expecting rate hikes to resume with the estimate at 5.50%, if the FED extends the pause then the market could take that as a very positive sign and rally as a result. If rates come in higher than expected, it could be a negative catalyst for markets because it would mean the FED sees the need to be more aggressive with its hikes. After this release at 2:30 pm, there is the presser that follows. This is usually closely monitored for hints at what is coming next, so volatility could increase during the conference.
Unemployment Claims
This is released weekly but feels like it's more impactful on FED weeks. The past few weeks have been trending in a positive direction (down) and seasonal employment often picks up and fewer and fewer people need to apply for unemployment. Any surprise here could be indicative of a larger problem and could be something to watch over a longer time horizon. This may move the markets in the short term as well.
Core PCE
Core PCE is out Friday morning at 8:30 am Eastern. This is a measure of the change in consumer prices excluding energy and food (two of the most volatile). Market reaction to this could be interesting, the recent inflation numbers came out better than expected, but a large driver in that was energy prices receding. Without energy and food, we will get a real idea of the prices of more stable goods. A surprise on the upside could be seen as pretty negative by the market, and a surprise down could be seen as extremely positive.
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.
