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We enter the pre-market on the final trading day of the week looking like we’re going to finish in the red, unless a big jump somehow takes market indices out of their near-term doldrums. But without any real catalysts in terms of economic data or consequential earnings reports, it’s hard to see where this would be coming from. The Dow is -90 points at this hour, with the S&P 500 -15 and the Nasdaq -80 points.
Some of this selling is due to profit-taking, as year-to-date we’re still positive across the board. The Nasdaq has been downright stellar since the start of the year, still +12%, with the small-cap Russell 2000 +8.5%. The S&P 500 remains +5% higher from its 2022 close, while the blue-chip Dow brings up the rear, +1% since the beginning of January.
Next week’s Consumer Price Index (CPI) is the next potential lightning rod that augments the trajectory of markets moving forward. Year over year, we continue to come down: last time around, we saw year-over-year CPI at +6.4% — well off the peak +9.1% we saw in June of last year. Core was even better at +5.7%, nearly 100 bps lower than September’s +6.6%.
If these numbers follow what we’ve seen in the recent past, we might expect a further steady deterioration in these levels as +2% (the Fed’s optimum inflation rate) eventually comes back into view. But analysts have been keeping one eye on a sudden drop in key inflation data like CPI, which would be something of a double-edged sword: tumbling inflation numbers would hasten the Fed’s reversal in interest rate policy, but it might bring us closer to an actual economic recession.
Speaking of consumer pricing, Super Bowl LVII is this Sunday, with the Kansas City Chiefs and the Philadelphia Eagles vying for the Vince Lombardi trophy. Both teams have won the title in recent years: KC defeated San Francisco in 2020, while Philly upset Tom Brady’s New England Patriots back in 2018. The betting line is close: Philly is -1.5 points currently, with the total points scored over/under at 51.
Gaming stocks — DraftKings (DKNG - Free Report) , MGM (MGM - Free Report) and Caesar’s (CZR - Free Report) — are all Zacks Rank #3 (Hold)-rated ahead of the big game. Similarly for popular restaurants — Domino’s (DPZ - Free Report) , Papa John’s (PZZA - Free Report) and Wingstop (WING - Free Report) — are also Holds this morning. Currently the best bets in terms of ways to enhance your portfolio are in beer and spirits distributors — Anheuser-Busch InBev (BUD - Free Report) and bourbon and whiskey deliverer BrownForman (BF.B - Free Report) , both of which are Zacks Rank #2 (Buy), as is Coca-Cola (KO - Free Report) .
Image: Bigstock
Should You Invest in Super Bowl Weekend?
Friday, February 10th, 2023
We enter the pre-market on the final trading day of the week looking like we’re going to finish in the red, unless a big jump somehow takes market indices out of their near-term doldrums. But without any real catalysts in terms of economic data or consequential earnings reports, it’s hard to see where this would be coming from. The Dow is -90 points at this hour, with the S&P 500 -15 and the Nasdaq -80 points.
Some of this selling is due to profit-taking, as year-to-date we’re still positive across the board. The Nasdaq has been downright stellar since the start of the year, still +12%, with the small-cap Russell 2000 +8.5%. The S&P 500 remains +5% higher from its 2022 close, while the blue-chip Dow brings up the rear, +1% since the beginning of January.
Next week’s Consumer Price Index (CPI) is the next potential lightning rod that augments the trajectory of markets moving forward. Year over year, we continue to come down: last time around, we saw year-over-year CPI at +6.4% — well off the peak +9.1% we saw in June of last year. Core was even better at +5.7%, nearly 100 bps lower than September’s +6.6%.
If these numbers follow what we’ve seen in the recent past, we might expect a further steady deterioration in these levels as +2% (the Fed’s optimum inflation rate) eventually comes back into view. But analysts have been keeping one eye on a sudden drop in key inflation data like CPI, which would be something of a double-edged sword: tumbling inflation numbers would hasten the Fed’s reversal in interest rate policy, but it might bring us closer to an actual economic recession.
Speaking of consumer pricing, Super Bowl LVII is this Sunday, with the Kansas City Chiefs and the Philadelphia Eagles vying for the Vince Lombardi trophy. Both teams have won the title in recent years: KC defeated San Francisco in 2020, while Philly upset Tom Brady’s New England Patriots back in 2018. The betting line is close: Philly is -1.5 points currently, with the total points scored over/under at 51.
Gaming stocks — DraftKings (DKNG - Free Report) , MGM (MGM - Free Report) and Caesar’s (CZR - Free Report) — are all Zacks Rank #3 (Hold)-rated ahead of the big game. Similarly for popular restaurants — Domino’s (DPZ - Free Report) , Papa John’s (PZZA - Free Report) and Wingstop (WING - Free Report) — are also Holds this morning. Currently the best bets in terms of ways to enhance your portfolio are in beer and spirits distributors — Anheuser-Busch InBev (BUD - Free Report) and bourbon and whiskey deliverer BrownForman (BF.B - Free Report) , both of which are Zacks Rank #2 (Buy), as is Coca-Cola (KO - Free Report) .
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