The Dow Jones Industrial Average, the Standard & Poor’s 500 Index, and the NASDAQ Composite all ended last week with a Friday rally, gaining .75%, .85%, and 1.29% respectively. A generally positive earnings season so far, and expectations the Federal Reserve will likely be more accommodative in 2019 than originally thought, outweighed a government shutdown and worries over global economic growth. For the week as a whole, the major indices were little changed, but the .12% advance squeaked out by the Dow marked its fifth winning week in a row.
Things really pick up in the week ahead, as the calendar for the last week of January is jam-packed. The Federal Open Market Committee will conclude its two-day policy meeting on Wednesday, followed by a press conference from Chairman Jerome Powell. Wall Street is by no means expecting an interest rate hike, but it is wondering aloud about actions regarding the Fed’s balance sheet – and the whole issue has the potential to be market moving. On Friday we’ll get the January Jobs Report from the US Department of Labor – expectations are for the economy to add about 171,000 jobs and for the employment rate to improve a notch, to 3.8%.
For every day of this week, the market will be digesting a plethora of earnings reports in what is the busiest week of earnings season. Over 120 S&P 500 companies are scheduled to report results this week, including widely followed names such as Apple, Amazon.com, Microsoft, Facebook, Boeing, McDonalds, Visa, and Chevron. According to I/B/E/S data from Refinitiv, fourth quarter earnings are expected to increase 14.3% from the fourth quarter of 2017. Enjoy the week – and as always, call with any questions or if you would like to set up a meeting.
All the best,