In a busy earnings week, Tesla (TSLA) was the star, which after its earnings beat rallied over 15% making some options buyers very happy the next morning. The rally continued the following days where it ended the week up over 20%.
Even with the massive beat, it did not help the market as a whole with the S&P 500 ($SPX) (SPY) finishing the week just under 1.0%.
We are back on the earnings flow this week with a lot of big names reporting through out the week as well as being back into a fairly large news week.
Here are 5 things to watch this week in the Market.
Earnings
The earnings releases are stacked deep this week with Waste Management (WM) on Monday, Alphabet (GOOGL), Visa (V), Advanced Micro Devices (AMD), and McDonalds (MCD) are the big hitters on Tuesday. AMD could be particularly important to watch if you trade anything in the tech sector as it could be a precursor to the Nvidia earnings next month and the Apple earnings later this week.
Wednesday Microsoft (MSFT), Meta Platforms (META), and Caterpillar (CAT) all report earnings. Microsoft and Meta will be important to watch for the tech narrative as being a large part of the underlying indexes, CAT could be important for other reasons. They produce a large percentage of construction equipment so how they report and guide out the next few quarters could have an impact on the market and the economy as a whole.
Thursday there are some additional big hitters with Apple (AAPL) and Amazon (AMZN) and both of these report after the market closes. Both of these have the power to move the indexes on their own so together it could cause a lot of movement in the overnight session.
JOLTS
In addition to earnings, we are also sitting on a pretty large news week. First up is JOLTS Job openings on Tuesday at 10 am. Being the last set of job’s numbers before the election it could cause some additional movement in the market, it’s also possible that any previous month's revisions are held off for another month.
Advanced GDP
Wednesday Advanced GDP comes out at 8:30 am and this could be a very volatile release. This estimate is set for 3.0% growth, which would normally be a sign of a healthy economy. But with the constant increase of consumer credit over the past several months it's possible that we could sell off on a beat of GDP. If we miss, we could see the market actually rally as it could mean more aggressive rate cuts are coming from the Fed.
Core PCE
Speaking of the Fed, Thursday their favorite measure of inflation, the PCE Price Index is out. This should provide a better view of whether the Fed truly has beaten inflation and if more rate cuts can continue. The forecasted number is an increase of 0.3% which is up from the previous increase of 0.1%. If this comes in higher than expected it's possible we see the market start to sell off as that would be a fairly hot PCE print. If we come in lower than expected we could see the market rally on a potential confirmation that the Fed is on the right track.
Unemployment rate/Non-Farm Payrolls
Both the Unemployment rate and the Non-Farm payrolls are out Friday morning, and much like JOLTS, this Non-farm report could cause a lot of volatility as it’s the last one before a fairly contentious election. If it comes in lower than forecasted, which is already low at 125,000 jobs, then we could see the market start to see some selling pressure. A match or a beat could have the opposite effect.
This is a similar case for the unemployment rate, although this has been fairly stable over the past several months.
Best of luck this week and don’t forget to check out my daily options article.
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