By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- It’s a big week for the markets, with lots of important events; notably, we have 20% of the S&P 500 companies reporting earnings this week, including Coca-Cola, Shopify, Cisco and Applied Materials. The earnings season has been surprisingly robust so far, with 79% of the S&P 500 posting positive earnings surprises, and forward guidance has been upbeat, showing healthy spending from both businesses and consumers.
- A busy slate of economic reports will be highlighted by the Consumer Price Index (CPI) on Tuesday, U.S. retail sales data on Thursday, and the Philadelphia Fed Manufacturing data, also on Thursday. January CPI and core CPI (excluding food and energy) are expected to rise 0.2% and 0.3% month over month, respectively, which would result in a 2.9% and 3.7% year over year change, respectively. CPI has not printed below 3% since March 2021, and that level would represent significant progress on the U.S. Federal Reserve’s (Fed’s) campaign to rein in price changes. January retail sales are expected to decline after a strong December, and the Philly Fed index is expected to be negative, which would be the 19th negative reading in the past 21 months.
- And finally, the barrage of Fed speakers continues, with nine on the docket. Expect them to continue to manage Fed rate-cut expectations, indicating two to three cuts beginning in June.
Three Things to Know
- Super Bowl halftime performers are not paid for their performance, and in 2015, the league even asked Rihanna, Katy Perry and Coldplay to pay the league for the privilege of performing. Per league policy, the NFL covers all costs related to the production of the show, but the talent is only compensated for travel expenses. For the artist, the Super Bowl halftime show is essentially a 13-minute Super Bowl commercial. With a television audience of over 100 million viewers, the exposure can quickly convert into financial gain. Justin Timberlake saw his sales rise 534% after he performed in 2018, Lady Gaga’s sales spiked 1,000% following her 2017 performance and Rihanna saw a 390% increase in digital sales. (Source: Fansided.com)
- Of the 10 teams that have won multiple Super Bowls, the 49ers and Chiefs have the second and fourth best “rest of year” returns for the S&P 500 at 20.2% and 10.9%, respectively. (Source: Bespoke)
- The weight of the top 10 stocks in the S&P 500 (based on the percentage of market cap) is 32.5%. Those 10 stocks contributed 21.2% of the index’s earnings over the trailing 12 months. (Source: @MikeZaccardi)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.