Three Things to Know & Watch

Jan 24, 2022

By Bill Hornbarger, Chief Investment Officer

Three Things to Watch

  • There will be a large number of earnings reports this week, coming after the NASDAQ and S&P 500 suffered their worst weeks since March 2020. Some of the higher profile companies reporting this week include Apple, Tesla, Microsoft, Intel, and McDonald’s. Earnings forecasts for the market, as a whole, remain positive despite recent weakness, particularly in the tech-heavy NASDAQ.
  • The Fed meets for the first time in 2022 to discuss monetary policy. The two-day Federal Reserve meeting should provide some clarity on policymakers’ thoughts on the end of quantitative easing and the pace and timing of interest rate increases. Futures are currently pricing in the first increase in the target Fed funds rate in March (25 basis points) and a total of four this year.
  • Consumer confidence will be released on Wednesday and is expected to decline after three consecutive months of increases. And finally, the week ends with the fourth-quarter GDP report reflecting expectations that the economy grew at a 5.8% pace despite the prevalence of the Omicron variant.

Three Things to Know

  • The S&P 500 is up 740% since the March 2009 bottom, despite five corrections (declines greater than 10%) and one bear market (March 2020). Source: Ben Carlson, A Wealth of Common Sense
  • The NASDAQ is down 16% from its high and is having the worst start to a year since 2008. Source: Seeking Alpha
  • The S&P 500 was higher in the 12 months that followed each of the last seven cycles of the Fed raising interest rates. Source: Jeffries

 

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.