Market This Week: 1/23/2023 - 1/27/2023

Coming up: a busy week of corporate earnings, fourth-quarter GDP figures, PCE prices

Markets

• Dow Jones: 33,375.49 (+1.00%) 📈

• S&P 500: 3,972.61 (+1.89%) 📈

• Nasdaq: 11,140.44 (+2.66%) 📈

  *Stock numbers as of market close on January 20th

Earnings season could enter one of its busiest weeks with reports from some of the largest companies in the world. We can expect earnings from Microsoft, Johnson & Johnson, Tesla, AT&T, Verizon, Boeing, IBM, Visa, and Mastercard, among others. On Tuesday, S&P Global will release its Composite PMI for January, gauging business activity across the U.S. On Thursday, the Bureau of Economic Analysis (BEA) will issue the advance estimate for the fourth-quarter gross domestic product (GDP), followed by its Personal Consumption Expenditures (PCE) Price Index for December on Friday. The latest updates on the housing market will include new and pending home sales for December.

Key Takeaways

• Earnings season enters one of its busiest weeks, with earnings from Microsoft, Johnson & Johnson, Tesla, AT&T, Verizon, Boeing, IBM, Visa, and Mastercard, among others.

• S&P Global will release its Composite PMI for January on Tuesday, gauging business activity across the U.S.

• On Thursday, the Bureau of Economic Analysis (BEA) will issue the advance estimate for the fourth-quarter gross domestic product (GDP).

• The BEA will also release its Personal Consumption Expenditures (PCE) Price Index for December on Friday, providing the latest update on inflation.

• The latest updates on the housing market will include new and pending home sales for December.

Events Calendar

Monday, January 23

• Conference Board Leading Index (Dec)

• Baker Hughes Company BKR 0.00%↑, Brown & Brown Inc. BRO 0.00%↑, Synchrony Financial SYF 0.00%↑, Logitech International LOGI 0.00%↑, Zions Bancorp ZION 0.00%↑, Crane Holdings Company CR 0.00%↑, and F.N.B. Corporation FNB 0.00%↑ report earnings

Tuesday, January 24

• S&P Global Composite PMI (Jan)

• Richmond Fed Manufacturing Index (Jan)

• Microsoft MSFT 0.00%↑, Johnson & Johnson JNJ 0.00%↑, Danaher Corp. DHR 0.00%↑, Verizon Communications VZ 0.00%↑, Texas Instruments TXN 0.00%↑, Raytheon RTX 0.00%↑, Lockheed Martin LMT 0.00%↑, Union Pacific Corp. UNP 0.00%↑, General Electric GE 0.00%↑, Intuitive Surgical ISRG 0.00%↑, Canadian National Railway CNI 0.00%↑, 3M Company MMM 0.00%↑, The Travelers Companies TRV 0.00%↑, Capital One Financial COF 0.00%↑, Halliburton HAL 0.00%↑, and D.R. Horton DHI 0.00%↑ report earnings

Wednesday, January 25

• Tesla TSLA 0.00%↑, Abbott Laboratories ABT 0.00%↑, NextEra Energy NEE 0.00%↑, AT&T T 0.00%↑, IBM IBM 0.00%↑, Boeing BA 0.00%↑, Elevance Health ELV 0.00%↑, Automatic Data Processing ADP 0.00%↑, ServiceNow Inc. NOW 0.00%↑, Progressive Corp. PGR 0.00%↑, U.S. Bancorp USB 0.00%↑, CSX Corp. CSX 0.00%↑, General Dynamics GD 0.00%↑, Freeport McMoran FCX 0.00%↑, Crown Castle Inc. CCI 0.00%↑, Norfolk Southern Corp. NSC 0.00%↑, Hess Corporation HES 0.00%↑, Kimberly-Clark KMB 0.00%↑, Las Vegas Sands LVS 0.00%↑, and Nasdaq Inc. NDAQ 0.00%↑ report earnings

Thursday, January 26

• U.S. GDP Growth Rate - Advance Estimative (Q4 2022)

• Durable Goods Orders (Dec)

• Retail Inventories (Dec)

• Wholesale Inventories (Dec)

• Quarterly PCE Prices (Q4 2022)

• Kansas Fed Composite Index (Jan)

• New Home Sales (Dec)

• Visa V 0.00%↑, Mastercard MA 0.00%↑, Comcast Corporation CMCSA 0.00%↑, Intel INTC 0.00%↑, Marsh & McLennan Companies MMC 0.00%↑, Northrop Grumman Corp. NOC 0.00%↑, Scherwin-Williams Co. SHW 0.00%↑, Blackstone Inc. BX 0.00%↑, Valero Energy VLO 0.00%↑, Archer-Daniels-Midland Company ADM 0.00%↑, Dow Inc. DOW 0.00%↑, Xcel Energy XEL 0.00%↑, Nokia NOK 0.00%↑, Deutsche Bank DB 0.00%↑, T. Rowe Price Group TROW 0.00%↑, Tractor Supply Co. TSCO 0.00%↑, Southwest Airlines LUV 0.00%↑, Robert Half International RHI 0.00%↑, and U.S. Steel Corp. X 0.00%↑ report earnings

Friday, January 27

• Personal Income and Spending (Dec)

• Personal Consumption Expenditures (PCE) Price Index (Dec)

• Michigan Consumer Sentiment Index - Final Reading (Jan)

• Pending Home Sales (Dec)

• Chevron CVX 0.00%↑, American Express AXP 0.00%↑, Charter Communications CHTR 0.00%↑, HCA Healthcare Inc. HCA 0.00%↑, Colgate-Palmolive CL 0.00%↑, Roper Technologies ROP 0.00%↑, Gentex Corporation GNTX 0.00%↑, and WisdomTree Inc. WT 0.00%↑ report earnings

  

Earnings Season Shifts Into High Gear

Next week could be one of the busiest this earnings season, featuring reports from some of the world’s largest companies. Microsoft, Johnson & Johnson, Verizon, and Lockheed Martin will report earnings on Tuesday, followed by Tesla, AT&T, IBM, and Boeing on Wednesday. Thursday’s earnings lineup will include Visa, Mastercard, and Intel. The week will wrap up with earnings from Chevron and American Express on Friday.

Earnings projections for S&P 500 companies have improved slightly in recent weeks, with an estimated earnings decline of 3.9% for the latest quarter, compared to 4.1% projected at the start of the year, according to research from FactSet. Analysts now project three consecutive quarters of earnings declines extending into the second quarter of this year, with Q1 and Q2 earnings projected to fall 0.6% and 0.7% on an annual basis, respectively, before rebounding in the second half of 2023.

Fourth-Quarter GDP Figures

On Thursday, the Bureau of Economic Analysis (BEA) will release the advance estimate for the fourth-quarter gross domestic product (GDP), tracking whether the U.S. economy expanded during the last three months of 2022. Economists project the U.S. economy grew 2.5% at a seasonally-adjusted annual rate, following a 3.2% expansion in the third quarter and after two consecutive quarterly declines in the first half of the year. Growth likely decelerated from the third quarter due to a slowdown in consumer spending, which accounts for nearly 70% of the U.S. GDP.

December PCE Prices

The BEA will also release its Personal Consumption Expenditures (PCE) Price Index for December on Friday, providing the latest update on inflation. PCE prices likely rose just 0.1% last month, down from 0.4% in November. On an annual basis, price growth likely decelerated to a rate of 5.1%, down from 5.5% in November and a recent peak of 7% in June. Core prices, which exclude food and energy costs, are projected to have risen 4.4% year-over-year, down from 4.7% in November.

A lower-than-expected reading could prompt Federal Reserve policymakers to decide on a smaller interest rate hike of 25 basis points at the upcoming meeting of the FOMC beginning on Jan. 31. It would also add to recent data showing consumer and producer prices decelerated in December, with the annual rate of consumer inflation falling to its lowest level in over a year.

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