U.S. Stocks Prepare for A Volatile Week
Ahead of a potentially turbulent week filled with top tech earning reports and a key Federal Reserve rate policy judgement, the U.S stock futures observed a slight drop. As per our sources, futures tied to Dow Jones Industrial Average suffered a blow by 86 points, a 0.2% decrease, paralleled by a 0.2% and 0.3% retreat in S&P 500 and Nasdaq 100 futures respectively.
Recap of Last Week’s Trading Performance
The last week witnessed a steady rise in all three major indexes, courtesy of a strong fourth quarter economic growth and a year-on-year core inflation rate that surprisingly, fell short of expectations, indicating a slowdown in the inflation rate. Nonetheless, the market growth was held back owing to underwhelming earning results of tech heavy-hitters like Intel and Tesla.
A Stacked Earnings Week Looms Ahead
With 19% of companies part of the S&P 500 slated to report their earnings, this week seems to be the busiest earnings period. Tech giants like Apple, Microsoft, Meta, Amazon, and Alphabet are all set to announce their results. Dow members, Boeing and Merck are also on the watchlist.
Upcoming FOMC Policy Meeting
In conjunction with the earnings week, the Federal Open Market Committee (FOMC) is also set to convene for a two-day policy meeting on Tuesday. Market watchers predict a steady rate as the CME Group’s fed funds futures market pegs a 97% possibility for the same. A leading financier at Carson Group expects a reduction in rates later in the year, potentially leading to an appreciation of capital, although it might not match the market’s expectations.
Scheduled to present their earnings this week from among the Dow Jones Industrial Average companies are Microsoft on Tuesday, Boeing on Wednesday, Honeywell and Merck on Thursday, with Apple and Chevron capping off the week on Friday.
With the imminent Federal Reserve’s monetary-policy meeting, a crucial December employment report, and multiple earnings reports from major tech companies like Alphabet, Microsoft, Apple, Amazon, and Meta Platforms, there’s a sense of anticipation in the air. Investors are keenly awaiting the Federal Reserve’s verdict on the interest rate and Chair Jerome Powell’s press conference for a sense of direction regarding the monetary policy. This anticipation is compounded by the fact that a few mega-cap stocks, christened the ‘Magnificent Seven’, now constitute a staggering 29% of the S&P 500, spotlighting the market’s heavy dependence on these stocks.
