Last week saw Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX) shining in their earnings reports, yet a sell-off affected the latter half of the week. Tesla suffered a 7.59% decline, erasing its modest early gains. Despite this, the S&P 500 managed to end the week 0.65% higher, largely bolstered by strong earnings performances.
This week promises more excitement, with several critical events scheduled, including PMI data, Federal Reserve announcements, and a host of other market-moving factors. Coupled with ongoing earnings calls, this week may bring increased volatility. Here are five key items to closely monitor in the market:
Earnings
Earnings season continues to be a dominant theme. While larger companies may carry broader market implications, earnings remain largely stock-specific risks. Traders should keep a keen eye on reporting schedules to navigate potential pitfalls. Notable market movers reporting this week include Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Visa (NYSE:V) on Tuesday after market close. On Wednesday, Meta Platforms (NASDAQ:META) will report, followed by Amazon (NASDAQ:AMZN) on Thursday, all of which have the potential to influence the overall market sentiment.
Flash PMI
Scheduled for Monday at 9:45 am Eastern, Flash Manufacturing, and Services PMI reports serve as vital gauges of sector expansion or contraction. A reading below 50 indicates contraction, while results below estimates could provide forward-looking indicators of economic health. Given the Federal Reserve’s efforts to manage economic conditions, any PMI miss might be perceived positively by the markets, especially with the upcoming FED events.
FOMC Meeting
On Wednesday, the FOMC will release its statement and announce the FED funds rate at 2:00 pm Eastern. Market expectations suggest a resumption of rate hikes, with an estimated rate of 5.50%. If the FED extends the pause on rate hikes, it could be interpreted as a positive sign, potentially sparking a market rally. Conversely, higher-than-expected rate hikes may act as a negative catalyst for the markets. The subsequent press conference at 2:30 pm will be closely watched for hints at the FED’s future plans, possibly leading to increased market volatility during the conference.
Unemployment Claims
Released weekly, Unemployment Claims often carry greater significance during FED weeks. Recent weeks have shown positive trends, with declining unemployment numbers reflecting seasonal employment gains. Unexpected shifts in this data could signal underlying issues, warranting monitoring over a longer time horizon and potentially impacting short-term market movements.
Core PCE
Set to be released on Friday at 8:30 am Eastern, Core PCE measures changes in consumer prices excluding energy and food, which are typically more volatile. Market reaction to this data could be intriguing, given the recent better-than-expected inflation numbers driven by receding energy prices. With energy and food removed from the equation, this data provides a clearer picture of stable goods’ prices. A positive surprise might be perceived as negative by the market, while a downside surprise could be seen as extremely positive.
As investors brace for a busy week, keeping a close watch on these developments will be crucial in navigating potential market fluctuations.
Featured Image: Unsplash
