Earnings, Bank Woes and Other Key Themes to Watch This Week

The S&P 500 ($SPX) (SPY) finished up about 1% last week, but that only tells a part of the story. The first half of the week we had a slow grid down followed but some explosive intraday moves the second half of the week. Earnings were mixed overall, but Tech had some better theme expected results with Google (GOOGL) announcing a massive buyback and Microsoft (MSFT) beating both top-line and bottom-line estimates. 

This week we have more excitement on deck with earnings, we also have the beginning of the month on Monday and plenty of potentially market-moving news the rest of the week. Sprinkle in the Fed Funds rate on Wednesday and it's possible we will have a really tradable week on our hands. 

Here are 5 things to watch in the market this week!

ISM Manufacturing PMI

First up on Monday at 10 am Eastern is the ISM manufacturing PMI. There have been continued contractions across PMI the past few months in the Manufacturing sector and it looks like the expectation is the same this month. This has moved the market in the past, so the potential for a market-moving news break is there, especially if it's a big miss or beat against the estimate. 

Layoffs

The news broke last week that First Republic Bank (FRC) is being placed under receivership, plus layoffs at Disney (DIS), Amazon (AMZN), and GAP Inc. (GAP). The past layoffs will more than likely not have much effect on the stock prices going forward, but at this point, there appears to be an announcement almost weekly. Mix that with the earnings coming out and it's possible there are some surprise moves around the stocks that are reporting. It's also possible that we have not heard the last about the banking woes that have been plaguing some of the smaller regional banks. 

Earnings

Once again there are a plethora of companies reporting this week. Sofi Technologies (SOFI), Uber Technologies (UBER), Anheuser-Busch (BUD), and AMC Entertainment (AMC) are among some of the most noticeable. One thing that may be worth watching this week is the forward guidance the companies offer. So far there have been many companies that have beat part or all of the estimated metrics, but weak guidance or a layoff announcement have overshadowed the event. It's possible this week's companies are no different. In addition, there 

is controversy surrounding Anheuser-Busch and all of the drama in the banking sector with FRC and some of the other boutique or regional banks. Earnings should definitely be watched this week.

FOMC

Wednesday at 2:00 and 2:30 Eastern we have the Fed Funds rate as well as the accompanying presser. A quarter-point raise is expected and with Powell Speaking at 2:30 the language he uses during the press conference will more than likely be under extreme scrutiny. In the past, Fed days have been extremely boring in the morning session and exciting after the number is released, so it's possible this repeats that trend. Either way, all eyes will be on Powell to see if he believes he has the inflation monster under control.

Non-Farm Payrolls

Friday at 8:30 Eastern is the Non-Farm payroll report. This number has been all over the place on release day and as of late seems to be less effective at moving the market than it used to be, but that is always subject to change. One of the real things to keep an eye on is buried in the report itself, which is the revision of last month's number. Lately, the number being released has received a downgrade when you look at the following month's report, and while this may not outwardly move the market it is very important on an overall economic level to keep an eye on.

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

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