Market Update: A recap of last week and what to watch this week.

There will be no hustle and bustle on Monday, at least none in terms of stock movements as the US celebrates Martin Luther King Jr. Day and the market will have its shutters down for the day. Nonetheless, here are the market updates we tailored especially for you!

A recap of the previous week:

Major Market Indices:

Dow Jones Industrial Average (DJIA): The Dow Jones closed the week at 37,592.98, experiencing a slight dip of 0.31% or 118.04 points.
NASDAQ Composite Index: The NASDAQ Composite closed at 14,972.76, showing a marginal increase of 0.02% or 2.57 points.
S&P 500 Index: The S&P 500 closed at 4,783.83, indicating a modest rise of 0.08% or 3.59 points.
Crude Oil (WTI): The front-month WTI crude oil price settled at $72.61 per barrel, reflecting a minimal decrease of 0.10%.

Bank Earnings:

BlackRock, Inc.: Beat earnings expectations with an actual EPS of 9.66, surpassing the estimate by 9.33%.
Bank of America Corporation: Exceeded estimates with an actual EPS of 0.7, outperforming by 2.64%.
JPMorgan Chase & Co.: Fell short of expectations with an actual EPS of 3.04, displaying a difference of -8.49%.
Wells Fargo & Company: Surpassed estimates with an actual EPS of 1.29, exceeding by 9.79%.
Citigroup Inc.: Beat estimates with an actual EPS of 0.84, outperforming by 4.09%.

Inflation and the Fed’s Sentiment:

US Consumer Price Index (CPI):

The Consumer Price Index (CPI) in the United States rose by 3.4% year-on-year in December 2023, slightly above the market’s expectations.

Summary of New York Fed President John C. Williams’ Speech:

President Williams highlighted the Federal Reserve’s commitment to its dual mandate of achieving maximum employment and price stability.
On employment, he noted a robust labor market and a steady return towards balance.
Regarding inflation, Williams acknowledged the improvement since the peak in June 2022, emphasizing that there’s still work to be done to reach the Fed’s 2% longer-run goal.
He expressed confidence that the current restrictive monetary policy would restore balance and bring inflation back to the desired level.
Williams expects GDP growth to slow to around 1–1/4 percent, the unemployment rate to rise to approximately 4 percent, and PCE inflation to continue slowing to about 2–1/4 percent before reaching the Fed’s 2 percent longer-run goal next year.

Things to watch for this week

U.S. Retail Sales, Industrial Production, and Weekly Initial Jobless Claims (January 17–18):

On January 17, U.S. retail sales and industrial production data for December will be released, offering insights into consumer spending and the industrial sector. On January 18, the focus shifts to the weekly release of initial jobless claims, a key indicator of the job market’s health.

Existing Home Sales Data (January 19):

On January 19, existing home sales data for December will provide a snapshot of the U.S. housing market’s strength. Market reactions will depend on how the results align with expectations.

Earnings Reports:

Earnings season continues with a spotlight on major companies like Morgan Stanley, Goldman Sachs, PNC Financial, Interactive Brokers, Prologis, Charles Schwab, US Bancorp, Kinder Morgan, Alcoa, Truist Financial, KeyCorp, Fastenal Company, Birkenstock, Ally Financial, Comerica, Fifth Third, and Travelers. Observing how these reports influence market sentiment and sector trends is crucial.

OPEC Monthly Report and Oil Market Outlook:

Traders will closely watch the OPEC Monthly Oil Market Report, scheduled for 7 am ET on Wednesday. This report will provide an outlook for crude oil market developments, influencing expectations for oil demand. Keep an eye on how this impacts oil prices, which have been hovering near 12-month lows.

Bottom line

As we delve into the upcoming week, our eyes are on critical economic indicators and corporate earnings. U.S. retail sales and industrial production data, coupled with the weekly release of initial jobless claims, promise insights into the nation’s economic health. Existing home sales figures will provide a window into the housing market.

Earnings reports from major players like Morgan Stanley, Goldman Sachs, and others, particularly in banking and energy, will steer market sentiment. Additionally, the OPEC Monthly Oil Market Report will influence expectations for crude oil. Traders should navigate the week with caution, considering these factors that intertwine economic recovery, labor market trends, housing dynamics, and corporate performance in shaping market movements.

The key takeaways/market update is a series by AxeHedge, which serves as an initiative to bring compact and informative In/Visible Talks recaps/takeaways on leading brands and investment events happening around the globe.

Do keep an eye out for our posts by subscribing to our channel and social media.

None of the material above or on our website is to be construed as a solicitation, recommendation or offer to buy or sell any security, financial product or instrument. Investors should carefully consider if the security and/or product is suitable for them in view of their entire investment portfolio. All investing involves risks, including the possible loss of money invested, and past performance does not guarantee future performance.