Fed meeting, jobs data, Apple earnings: 1/30/2023 - 2/03/2023
Wall Street will be buzzing in the week ahead, as earnings from Big Tech, the Federal Reserve's first meeting of the year, and the monthly jobs report for January set up the busiest week of this year.
Markets
Dow Jones: 33,978.08 (+0.084%) 📈
S&P 500: 4,070.56 (+0.25%) 📈
Nasdaq: 11,621.71 (+0.95%) 📈
*Stock numbers as of market close on January 27th
Wall Street will face one of its busiest weeks of the year in the coming week, with earnings from Big Tech leaders, the Federal Reserve's first meeting and rate decision of 2023, and the monthly jobs report for January all set for release.
The S&P 500's most heavily-weighted components — Alphabet GOOGL 0.00%↑, Apple AAPL 0.00%↑, and Amazon AMZN 0.00%↑, as well as Facebook parent company META 0.00%↑ — are among important players scheduled to report fourth-quarter financial results through Friday.
Meanwhile, in Washington, D.C., Fed officials will meet on Jan. 31-Feb 1 and are expected to raise interest rates by 0.25% in Wednesday's policy decision. A press conference held by Fed Chair Jerome Powell Wednesday afternoon will offer investors crucial signs regarding the central bank's path forward on rate increases.
Finally, rounding out the week on Friday morning will be the government's January jobs report, set for release at 8:30 a.m. ET. Economists expect 185,000 jobs were added to the economy last month, consensus estimates from Bloomberg show.
Stocks have been on a tear to start 2023, as many investors bet weakening economic data will prompt the Federal Reserve to end its rate hiking cycle sooner than expected. All three major averages closed out their fourth-straight winning week on Friday.
The S&P 500 notched a weekly gain of around 2.5%, the Dow Jones Industrial rose 1.8%, and the technology-heavy Nasdaq Composite led the way with a rally north of 4%.
The 2023 rally will face its biggest test yet this week as mega-cap technology companies report earnings at a critical juncture for their businesses.
These results come as technology layoffs ramp up after hiring swelled during the post-pandemic boom. Last week, Alphabet announced plans to cut 12,000 jobs, while layoffs at Amazon and Meta Platforms also stand in the tens of thousands as growth comes back down to earth after surging in 2021.
On Wednesday, members of the Federal Open Market Committee (FOMC) are poised to lift rates by 25 basis points, marking another slowdown from the 0.50% rate increase the Fed announced in December, which itself was a step down from the 0.75% pace of rate hikes seen during the prior four meetings.
The FOMC will announce its decision at 2:00 p.m. ET, with Fed Chair Jerome Powell scheduled to hold a press conference beginning at 2:30 p.m. ET. The CME FedWatch Tool, which serves as a barometer for what investors believe the central bank's next move will be, shows markets are pricing in a 99.8% chance of a 25 basis point hike on Wednesday.
Elsewhere on the economic data front, the January jobs report comes out on Friday. The employment picture has moderated in recent months, but demand for workers remains high, with the labor market breezing through the Fed's monetary tightening campaign.
December's data showed the labor market added a robust 223,000 jobs during the month and a monthly average of 375,00 during all of last year — even as 425 basis points worth of rate hikes permeated through the economy.
Strategists who have doubted market expectations for the Fed to pause rate hikes point to continued labor market tightness, as wage pressures still pose a risk to inflation, even as consumer price increases continue to slow from multi-decade highs reached in the summer of 2022.
Overall, the fourth-quarter earnings season continues to be a modest disappointment, though the market's performance this year shows investors are largely not surprised.
Of the 29% of S&P 500 companies that have reported results to date, just 69% have seen earnings per share come in above estimates, below the 5-year average of 77% and the 10-year average of 73%, per data from FactSet.
For Amazon, key headwinds investors will be looking for color on include softening consumer discretionary spending and decelerating growth for its cloud business, AWS, according to Arun Sundaram, a senior equity analyst at CFRA Research.
For Apple, momentum on iPhone demand will be one of the biggest factors monitored by investors, while markets will be looking for any clues Alphabet offers on the state of the advertising business, given its exposure to this market through its Search and YouTube segments.
Other big names set to report include Advanced Micro Devices AMD 0.00%↑, Caterpillar CAT 0.00%↑, Qualcomm QCOM 0.00%↑, and Ford F 0.00%↑.
Though with a roster of companies reporting results, this deep, big splashes and surprising releases are no doubt going to be a part of the coming week's market narrative.
Outside of Friday's jobs report, the typical mix of month-end economic data will also feature, with manufacturing readouts from the Institute for Supply Management and S&P Global set for Wednesday, as well as Tuesday's reading on consumer confidence from The Conference Board, all set to be closely watched.
On the labor side, Wednesday's private payrolls data from ADP and Thursday's weekly report on initial jobless claims will set the table for Friday's nonfarm payrolls report.
Events Calendar
Monday, January 30
Dallas Fed Manufacturing Activity, January (-15.0 expected, -18.8 during the prior month)
Alexandria Real Estate Equities ARE, GE HealthCare GEHC, Helmerich & Payne HP, J&J Snack Foods JJSF, Philips PHG, SoFi Technologies SOFI, Whirlpool WHR
Tuesday, January 31
Employment Cost Index, Q4m (1.1% expected, 1.2% during prior quarter)
FHFA Housing Pricing Index, November (-0.5% expected, 0.0% during the prior month)
S&P CoreLogic Case-Shiller 20-City Composite, month-over-month, November (-0.50% expected, -0.52% during prior month)
S&P CoreLogic Case-Shiller 20-City Composite, year-over-year, November (6.80% expected, 8.64% during the prior month)
S&P CoreLogic Case-Shiller U.S. National Home Price Index, November (9.24% during the prior month)
MNI Chicago PMI, January (45.3 expected, 44.9 during the prior month, revised to 45.1)
Conference Board Consumer Confidence, January (108.2 expected, 108.3 during the prior month)
Conference Board Present Situation, January (147.2 during the prior month)
Conference Board Expectations, January (82.4 during the prior month)
Advanced Micro Devices AMD, Amgen AMGN, Boston Properties BSX, Caterpillar CAT, Exxon Mobil XOM, General Motors GM, Juniper Networks JNPR, Marathon Petroleum MPC, Match Group MTCH, McDonald's MCD, Mondelez International MDLZ, NVR NVR, Pfizer PFE, Phillips 66 PSX, Pitney Bowes PBI, Snap SNAP, Sysco SYY, UPS UPS
Wednesday, February 1
MBA Mortgage Applications, the week ended Jan. 27 (7.0% during the prior week)
ADP Employment Change, January (170,000 expected, 235,000 during the prior month)
S&P Global U.S. Manufacturing PMI, January Final (46.8 during the prior month)
Construction Spending, month-over-month, December (0.0% expected, 0.2% during prior month)
ISM Manufacturing, January (48.0 expected, 58.4 during the prior month)
FOMC Rate Decision (Lower Bound), Feb. 1 (4.50% expected, 4.25% prior)
FOMC Rate Decision (Upper Bound), Feb. 1 (4.75% expected, 4.50% prior)
Interest on Reserve Balances Rate, Feb. 2 (4.68% expected, 4.40% prior)
WARDS Total Vehicle Sales, November (14.30 million expected, 13.31 prior month)
Meta Platforms META, Aflac AFL, Allstate ALL, Boston Scientific BSX, e.l.f. Beauty ELF, eBay EBAY, Evercore EVR, Humana HUM, McKesson MCK, Meritage Homes MTH, MetLife MET, Novartis NVS, Old Dominion ODFL, Peloton Interactive PTON, Thermo Fisher Scientific TMO, Waste Management WM
Thursday, February 2
Challenger Job Cuts, year-over-year, January (129.1% during the prior month)
Unit Labor Costs, Q4 Preliminary (1.5% expected, 2.4% during prior quarter)
Nonfarm Productivity, Q4 Preliminary (2.5% expected,0.8% during prior quarter)
Initial Jobless Claims, the week ended Jan. 28 (200,000 expected, 186,000 during the prior week)
Continuing Claims, the week ended Jan. 21 (1.675 million during the prior week)
Factory Orders, December (2.2% expected, -1.8% during the prior month)
Factory Orders Excluding Transportation, December (-0.2% during the prior month)
Durable Goods Orders, December Final (5.6% during the prior month)
Durables Excluding Transportation, December Final (-0.1% during the prior month)
Non-defense Capital Goods Orders Excluding aircraft, December Final (-0.2% during the prior month)
Non-defense Capital Goods Shipments Excluding Aircraft, December Final (-0.4% during the prior month)
Apple AAPL, Alibaba Group BABA, Alphabet GOOGL, Amazon AMZN, Bristol-Myers Squibb BMY, Canada Goose GOOS, Cardinal Health CAH, ConocoPhillips COP, Eli Lilly LLY, Estee Lauder EL, Ferrari RACE, Ford Motor F, Gilead Sciences GILD, GoPro GPRO, Harley-Davidson HOG, Hershey Foods HSY, Honeywell HON, Merck MRK, MicroStrategy MSTR , News Corp. NWSA, Qualcomm QCOM, Quest Diagnostics DGX, Sirius XM SIRI, Skechers SKX, Starbucks SBUX, Under Armour UAA, World Wrestling Entertainment WWE
Friday, February 3
Two-Month Payroll Net Revision, January (-28,000 prior)
Change in Nonfarm Payrolls, January (185,000 expected, 223,000 during the prior month)
Change in Private Payrolls, January (185,000 expected, 220,000 during the prior month)
Change in Manufacturing Payrolls, January (10,000 expected, 8,000 during the prior month)
Unemployment Rate, January (3.6% expected, 3.5% during prior month)
Average Hourly Earnings, month-over-month, January (0.3% expected, 0.3% during prior month)
Average Hourly Earnings, year-over-year, January (4.3% expected, 4.6% prior month)
Average Weekly Hours All Employees, January (34.4 expected, 34.3 during the prior month)
Labor Force Participation Rate, January (62.3% expected, 62.3% during the prior month)
Underemployment Rate, January (6.5% prior month)
S&P Global U.S. Services PMI, January Final (46.6 during the prior month)
S&P Global U.S. Composite PMI, January Final (46.6 during the prior month)
ISM Services Index, January (50.3 expected, 49.6 during the prior month, revised to 49.2)
Aon AON, Cboe Global Markets CBOE, Cigna CI, Regeneron Pharmaceuticals REGN
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