Earnings, ISM Reports And Other Key Themes To Watch This Week

Last week was a wild week in the overall market and in individual names. Nvidia (NVDA) reported and saved the S&P 500 ($SPX) (SPY) from what started off as a very rough day. That was only to be negated later in the week thanks to a very hot CPE number. The SPY opened Friday with a 1% gap down where it just continued to chop around. Overall the SPY ended the week down roughly 2.50%. 

The Dow Jones Industrials Index ($DOWI) (DIA) was down -2.61% for the week while the Nasdaq 100 Index ($IUXX) (QQQ) was -2.94% lower.

This week will be packed with earnings again with some of the heavy hitters being Autozone (AZO), Target (TGT), Salesforce (CRM), Costco (COST), and TD Bank (TD). These are just a few of the market movers this upcoming week. Outside of earnings, it is a fairly quiet week with only a few releases of real note. Here are the top 5 themes to focus on this week in the Market.

Earnings

It is starting to feel like a broken record here, but earnings are still a theme for the markets. They are still very important to watch, especially after watching how a down market reacted to the NVDA earnings last week. With COST reporting this week along with TGT and AZO, the consumer sectors should be on the watchlist for a move. These also have the potential to show how the economy will fare in the coming months and year by listening to how these giants issue guidance too.

CB Consumer Confidence 

The Consumer Confidence number will be out Tuesday at 10 am est. Usually, this report does not spark a market move, however, it is possible with CPE coming in so hot last week that these sentiment reports will come under higher scrutiny. Markets have been acting strange around forward-looking indicators as of late, so if consumer confidence falls it's possible that the market reacts poorly as it could be a signal to the fed to raise rates more aggressively. 

ISM Manufacturing PMI

ISM PMI is out Wednesday at 10 am, and in addition to consumer confidence, the CPE spike will possibly force PMI back into the spotlight. We saw a slight expansion last month, but it's still firmly under 50 which indicated overall economic contraction. This could be a tricky read though, as a contracting economy is what the Fed is aiming for to control inflation. So the market could see bad news as good news if this displays a continued contraction of the overall economy.

ISM Manufacturing Prices

Also out at 10 am on Wednesday is ISM manufacturing prices, and as the name implies it is a survey of manufacturing prices. A print above 50 means higher prices and a print below 50 means lowering prices. With inflation possibly returning to the forefront of the news cycle if this number comes in higher than expected, it could be viewed as a negative by the market.  It should be noted that the last time this was over 50 was in October, but it has been on a steady rise over the past few months.

ISM Services PMI  

The last release on our inflation hit parade this week comes out Friday at 10 am est and its ISM services PMI. Similar to the manufacturing PMI, a strong economy would have this number come in over 50, which it has been hovering around for the past several months. Also similar to Manufacturing PMI, it is possible that this report could be viewed by the market as “Bad news is Good News”. If this comes out as an expansion then its possible the Fed signals a more hawkish stance and that could be construed as bad by the market. 

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

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