Market Drama

Welcome to this week’s Market Drama!

• The Stock Market:
  • The S&P 500 was up 0.7% for the week.
    • It’s up 18% year-to-date. 
  • Oil had a strong week as well, rebounded more than 2%.
  • We’ve seen the stock market rally off the October bear market lows. 
    • Big components of this change: inflation and earnings. 
    • If we hit the consensus expectation for earnings, we should see a drop of 9% year-over-year earnings for the S&P 500. This would mark the largest earnings decline reported by the index since Q2 of 2020. 
      • Analysts are predicting earnings growth of 0.1 centrally flat.
• Economic Data:
  • Retail sales were up 0.2% month-over-month. 
    • Below the 0.5% expectations. 
    • Retail sales matter because consumption is 69% of GDP.
  • Consumers have been very resilient.
  • Housing starts fell to 1.4 million from 1.56 million the prior month. 
  • Initial jobless claims came in at 228,000 which was better than the expected 240,000.

What to look out for this week: 

• The FOMC will take place Tuesday and Wednesday.
• On Wednesday the Fed is expected to hike interest rates 25 basis points. 
  • What will they say after?
• PCE inflation data comes out this week. 

Stay tuned for next week. Have a good one.

– Andres