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Up through last week, information pertaining to stock market moves have largely come from economic data and the Fed’s interpretation of it, year to date. This week, with the next Federal Open Market Committee (FOMC) meting scheduled for a week from tomorrow, we won’t be hearing from any members of the monetary policy body. But Q4 earnings pick up this week, and by Friday we’ll see the Fed’s preferred measure of inflation: Personal Consumption Expenditures (PCE).
Ahead of all this — there are no major economic reports due out until December Leading Economic Indicators after the opening bell — pre-market futures continue to bob higher overall: the Dow is +89 points, the S&P 500 is +14 and the tech-heavy Nasdaq is +85 points. These are off earlier-morning highs which saw the Nasdaq in triple-digits, but the S&P 500 still rides new all-time highs at 4886.50. Market participants are setting a relatively high marker ahead of the deluge of data we’re soon to see.
Earnings season brings us some real marquee names this week, including Netflix (NFLX - Free Report) Tuesday afternoon, Tesla (TSLA - Free Report) Wednesday after the bell and Intel (INTC - Free Report) Thursday once regular markets have closed. For Q4 earnings results posted so far, the main sector is Finance, which to this point has reported +6.3% earnings growth year over year and +2.3% higher revenues, according to Zacks Director of Research Sheraz Mian in his latest Earnings Preview report. Importantly, Sheraz says the data currently does not point to an earnings recession over the coming three quarters. (To read more, click here.)
In terms of economic prints, we’re again late-week heavy: aside from Weekly Jobless Claims Thursday morning, Durable Goods, Retail/Wholesale Inventories and New Home Sales will hit the tape. On Friday, December PCE numbers will be out, with core year over year expected to tick down 20 basis points (bps) to +3.0% — appreciably lower than the September 2023 cycle high +5.5%. Friday will also bring us Pending Home Sales; this housing data has been among the surprisingly strongest areas of the economy over the past several months.
Thus, we appear set up for continued complimentary economic news — that which will not force the Fed’s hand to cut interest rates anytime soon. While even the most pro-cut analysts tended not to foresee a move lower at the January FOMC meeting, currently revisions are being made for the following (March) meeting, as well. This would leave the April/May, June or July FOMC pow wows to introduce the Fed’s first rate cut since it slashed -1.00% mid-March 2020, at the onset of the Covid pandemic. Currently, rates have been steady at 5.25-5.50% since late July of last year.
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Q4 Earnings, Econ Data to Inform Fed Decisions
Up through last week, information pertaining to stock market moves have largely come from economic data and the Fed’s interpretation of it, year to date. This week, with the next Federal Open Market Committee (FOMC) meting scheduled for a week from tomorrow, we won’t be hearing from any members of the monetary policy body. But Q4 earnings pick up this week, and by Friday we’ll see the Fed’s preferred measure of inflation: Personal Consumption Expenditures (PCE).
Ahead of all this — there are no major economic reports due out until December Leading Economic Indicators after the opening bell — pre-market futures continue to bob higher overall: the Dow is +89 points, the S&P 500 is +14 and the tech-heavy Nasdaq is +85 points. These are off earlier-morning highs which saw the Nasdaq in triple-digits, but the S&P 500 still rides new all-time highs at 4886.50. Market participants are setting a relatively high marker ahead of the deluge of data we’re soon to see.
Earnings season brings us some real marquee names this week, including Netflix (NFLX - Free Report) Tuesday afternoon, Tesla (TSLA - Free Report) Wednesday after the bell and Intel (INTC - Free Report) Thursday once regular markets have closed. For Q4 earnings results posted so far, the main sector is Finance, which to this point has reported +6.3% earnings growth year over year and +2.3% higher revenues, according to Zacks Director of Research Sheraz Mian in his latest Earnings Preview report. Importantly, Sheraz says the data currently does not point to an earnings recession over the coming three quarters. (To read more, click here.)
In terms of economic prints, we’re again late-week heavy: aside from Weekly Jobless Claims Thursday morning, Durable Goods, Retail/Wholesale Inventories and New Home Sales will hit the tape. On Friday, December PCE numbers will be out, with core year over year expected to tick down 20 basis points (bps) to +3.0% — appreciably lower than the September 2023 cycle high +5.5%. Friday will also bring us Pending Home Sales; this housing data has been among the surprisingly strongest areas of the economy over the past several months.
Thus, we appear set up for continued complimentary economic news — that which will not force the Fed’s hand to cut interest rates anytime soon. While even the most pro-cut analysts tended not to foresee a move lower at the January FOMC meeting, currently revisions are being made for the following (March) meeting, as well. This would leave the April/May, June or July FOMC pow wows to introduce the Fed’s first rate cut since it slashed -1.00% mid-March 2020, at the onset of the Covid pandemic. Currently, rates have been steady at 5.25-5.50% since late July of last year.
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