Minutes before the final trading day of the month begins, futures are pointing to a mostly negative start for the major U.S. stock indexes. If stocks can hold on today, it would mark the best January performance in four years. In overnight trading, markets in Asia closed down, and the major European indexes are also in the red. Meanwhile, oil prices have edged lower, with West Texas Intermediate down about 0.7%, to around $77.40 a barrel.
Fourth-quarter earnings season continues to roll along, and there are a number of high-profile companies reporting this week. Traders will be particularly interested in what the likes of Amazon.com (AMZN), and APPLE (AAPL) have to say about consumer spending trends amid high inflation. Also, Meta Platforms (META), the parent company for Facebook, and Google parent Alphabet (GOOG) should provide some insight on advertising spending.
However, the center of attention this week is the Federal Reserve’s two-day policy meeting which wraps up on Wednesday. If everything goes according to expectations, the central bank should announce another quarter-point increase to its overnight target lending rate. More importantly, perhaps, traders hope to get some clues as to when the Fed might consider taking its foot off the monetary brake pedal. Following the worst year for investors since 2008, any sign that the end of rate hikes is in sight could help spark the beginning of a rebound for stocks.
Other economic reports on the docket for this week include the Institute for Supply Management’s manufacturing index for January due out tomorrow, where a modest decline is expected. The same day also brings the figures for job openings and construction spending for December. These will be followed on Thursday by factory orders for December, while Friday brings the key figures for nonfarm payrolls, the unemployment rate, and average hourly earnings for last month, among other reports.
All told, stocks began the week on a down note, as the Dow Industrials fell 260 points, or 0.8%, the S&P 500 was off by 52 points (1.3%), and the tech-heavy NASDAQ took the biggest hit, declining 227 points, or 2.0%.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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