Weekly: Fed Meeting & Jobs Ahead, A Next Down Leg is Upon Us？

U.S tech stocks had their best week since November with technology stocks moving higher for the 4th week in a row.

The $NASDAQ(.IXIC)$ surged more than 4% while the $S&P 500(.SPX)$ and the $DJIA(.DJI)$ posted smaller gains, rebounding from declines the previous week. With a couple trading days left in January, the $NASDAQ(.IXIC)$ was on track to record its strongest monthly result since last July.

As of last Friday, the $Straits Times Index(STI.SI)$ gained 3.05% last week and$S&P/ASX 200(XJO.AU)$ gained 0.56% last week.

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Technically, $S&P 500(.SPX)$ is in an uptrend since the October bottom, with a majority of stocks and sectors already in uptrends, here is what the $S&P 500(.SPX)$ looks like. A next down leg apon us？

Citi analysts suggested that the median trough and peak of a bear market rally could be between 13-18%, which could bring the $S&P 500(.SPX)$back to the 4,000-4,200 range.

Hartnett, an analyst at Bank of America, believes that investors do have good reasons to be bearish on U.S. stocks, and recommends that investors withdraw when the $S&P 500(.SPX)$ hits the 4,100-4,200 range.

Macro Factors 

Subdued earnings: Nearly one-third of the way through earnings season, about 69% had exceeded net income expectations as of Friday, trailing the five-year average of 77%, according to FactSet. With the peak of quarterly earnings season at hand, profit margins continue to shrink amid high inflation. Overall, earnings are expected to decline 5% relative to a year ago. 

GDP momentum: U.S. economic growth remained in solidly positive territory in the Q4 2022, GDP grew at an annualized rate of 2.9% in the latest period, beating most economists’ expectations. For full-year 2022, GDP rose 2.1%, easing concerns about the prospects of a protracted recession.

Inflation easing: The FED’s preferred gauge for tracking inflation showed a further cooling of price increases. The government reported on Friday that its Personal Consumption Expenditures Price Index rose at an annual 5.0% rate in December, down from 5.5% in November.  Excluding food and energy, prices rose at a 4.4% annual rate—the lowest in 14 months.

Sectors & Stocks Performances Review

In terms of sectors, the Consumer Cyclical sector in $S&P 500(.SPX)$ see best performance by a 5.76% rise. The Healthcare sector see worst performance with a 0.72% drop, and Consumer Cyclical, Technology, and realestate sectors rose among the top three.

Weekly Top Gainers of$S&P 500(.SPX)$​

The Top 10 winners are: $Tesla Motors(TSLA)$ ,$Western Digital(WDC)$ ,$Seagate Technology PLC(STX)$ ,$NVIDIA Corp(NVDA)$ ,$American Express(AXP)$ ,$Albemarle(ALB)$ ,$United Rentals(URI)$ , $Capital One(COF)$ ,$Pac Roots Cannabis Corp.(PACRF)$ ,$MarketAxess(MKTX)$ .

The Week Ahead: Jan 30th-Feb 3rd

Notable Earnings to Watch: 

$SoFi Technologies Inc.(SOFI)$ ,$Pfizer(PFE)$, $McDonald's(MCD)$, $Exxon Mobil(XOM)$ ,$General Motors(GM)$ ,$Advanced Micro Devices(AMD)$ ,$GlaxoSmithKline PLC(GSK)$ ,$Meta Platforms, Inc.(META)$ ,$Apple(AAPL)$ ,$Amazon.com(AMZN)$ ,$Alphabet(GOOG)$ ,$Qualcomm(QCOM)$ ,$Ford(F)$ $Eli Lilly and(LLY)$ ,$Merck(MRK)$ ,$ConocoPhillips(COP)$

Key events this Week:

Fed pivot? At Fed's next meeting ending on Wednesday, the FED is expected to lift its benchmark interest rate again, but it could hike the rate by just a quarter of a percentage point rather than a half point.

Jobs ahead: A labor market update due out on Friday is likely to be the most closely watched economic report of the week. The release covering January follows a report that showed the economy generated 223,000 new jobs in December—the fifth consecutive month with jobs gains in the 200,000 to 300,000 range and the 24thmonth in a row with at least 200,000.

Monday

• No major reports scheduled

Tuesday

• S&P/Case-Shiller 20-City Composite Home Price Index
• Consumer Confidence Index, The Conference Board

Wednesday

• U.S. Federal Reserve Board concludes two-day policy meeting, Chair Jerome Powell holds press conference
• ADP National Employment Report, ADP
• Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics
• Institute for Supply Management’s manufacturing index
• Construction spending, U.S. Census Bureau

Thursday

• Factory orders, U.S. Census Bureau
• Weekly unemployment claims, U.S. Department of Labor

Friday

• Jobs and unemployment, U.S. Bureau of Labor Statistics
• Institute for Supply Management’s nonmanufacturing index

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​How is your trading plan in this week？ 

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