Earnings, GDP And Other Key Themes To Watch This Week

It was another busy week in the markets. Bank earnings were less than stellar as most of them faced some selling pressure going into Wednesday's session. This heavy selling expanded into the broader market Thursday. Just when we thought the bear market had reared its ugly head again, stocks stage a might rally to close out the week.

Despite all the excitement, the S&P 500 ($SPX) (SPY) was only down 0.27% for the week while the blue chip Dow Jones Industrials Index ($DOWI) (DIA) was down 2.38%. The Nasdaq 100 Index ($IUXX) (QQQ) was the strongest index finishing up 1.39% on the week.

This week has more earnings on tap with giants like Verizon (VZ) and Lockheed Martin (LMT) due up on Tuesday and many more due through the week. Earnings fun is continuing for traders so here are 5 things to watch this week.

Earnings

Earnings are going to be a constant theme the next few weeks. A lot of companies appear to be getting stung with the inflation bug as input costs are higher and affecting profits. VZ and LMT are reporting Tuesday along with a lot of other large caps like Johnson & Johnson (JNJ) and Boeing (BA). Later in the week airlines also report with Southwest Airlines (LUV) and American Airlines (AAL) on Thursday. Airline earnings will be particularly interesting after the repeated disasters they had getting people off the tarmac on time. Either way earnings should continue to make for exciting trading. 

Services/Manufacturing PMI

Both Services and Manufacturing PMI are due Tuesday 15 minutes after the market opens. These reports were market movers the last half of last year and it will be interesting to see if they continue to move them this week. With better then expected reports the last two months it is possible that the trend continues and markets could rally off that relief. If it starts to pick up again though, that could send markets south as rate hike fears could start to swirl again.

US GDP

US GDP is due Thursday at 8:30 EST and it is possible this will really move the markets. There has been a lot of talk about recessionary figures by financial media, and this report could be very telling if they are on to something or not. While it's possible this report does not move the market directly, it could be very telling about the overall temperature of the economy and spending. 

New Home Sales

At 10 am also on Thursday New Home Sales will be released. This report should be similar to GDP in so far as it may not directly move the markets, but should give some insight into the appetite for larger purchases. This release will mark a full quarter with higher mortgage rates so it will be interesting to see how homebuyers fared with their new borrowing power.

PCE

The final number on the hit parade for this week is PCE which is due out Friday at 8:30 am Eastern. Yet another measure of inflation but across all personal consumption goods, it's possible this gives the market energy to move. If it comes in lower than previous (as I cannot find expected numbers) then it's possible the market rallies on better pricing. If it comes in hotter then previous it's possible we see some downside in the markets and it could spook them into thinking the inflation monster is rearing its head again. 

Best of luck this week and don’t forget to check out my daily options article.

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