Weekly Economic Update: January 24, 2023
January 24, 2023 / Madison Luck / Comments Off on Weekly Economic Update: January 24, 2023
Presented by Nicholas Wealth Management
THIS WEEK ON WALL STREET
Stocks started the week off strong on Monday, closing above the 200 day moving average. However, with a plethera of companies reporting earnings this week from the fourth quarter of 2022, things can change quickly. We will be watching the earnings reports closely for future market direction and whether the current rally can continue to have legs.
LAST WEEK ON WALL STREET
Stocks showed mixed results last week as recession fears resurfaced in response to weak economic data and a tepid start to a new corporate earnings season. The Dow Jones Industrial Average skidded 2.70%, while the Standard & Poor's 500 declined 0.66%. But the Nasdaq Composite index gained 0.55% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 0.50%.1,2,3
MIXED ECONOMIC DATA
Stocks weakened to start the week amid discouraging corporate earnings and troubling economic data. Disappointing retail sales and manufacturing reports sparked concerns that the Fed may have gone too far in hiking rates, while a drop in initial jobless claims diminished chances of a near-term pause in rate hikes. Welcome news from two big technology names on Friday powered a strong rally that mixed significant indices.
The start of the earnings season was a drag on investor sentiment. While 69% of the S&P 500 constituent companies that reported earnings by Thursday (48 companies) exceeded expectations, the percentage of "beats" is below the three-year average. More concerning, however, was that average earnings declined by more than 2%.4
CONSUMERS RETRENCH
Retail sales fell 1.1% in December, capping an overall weak holiday shopping season. November retail sales were revised downward to -1.0%, from the earlier estimate of -0.6%. Compared to November-December 2021, sales increased by 5.3%, below the 6 to 8% increase expected by The National Retail Federation.5,6
Many economists viewed these lackluster numbers as evidence of a weakening consumer. A more cautious consumer raises more concerns about a recession at some point this year since the primary driver of U.S. economic growth is consumer spending.
Tuesday: Purchasing Managers' Index Composite.
Thursday: Gross Domestic Product (GDP). Durable Goods Orders. New Home Sales. Jobless Claims.
Source: Econoday, January 20, 2023
Tuesday: Microsoft Corporation (MSFT), General Electric Company (GE), Verizon Communications, Inc. (VZ), Johnson & Johnson (JNJ), Lockheed Martin Corporation (LMT), Texas Instruments, Inc. (TXN), Union Pacific Corporation (UNP), D.R. Horton, Inc. (DHI), Raytheon Technologies Corporation (RTX).
Wednesday: AT&T, Inc. (T), The Boeing Company (BA), Tesla, Inc. (TSLA), International Business Machines Corporation (IBM), Lam Research Corporation (LRCX), Abbott Laboratories (ABT), CSX Corporation (CSX), NextEra Energy, Inc. (NEE), KimberlyClark Corporation (KMB), Norfolk Southern Corporation (NSC), General Dynamics (GD).
Thursday: Intel Corporation (INTL), Visa, Inc. (V), Mastercard, Inc. (MA), Blackstone, Inc. (BX), Northrop Grumman Corporation (NOC), Southwest Airlines Co. (LUV), Rockwell Automation, Inc. (ROK).
Friday: Chevron Corporation(CVX), HCA Healthcare, Inc. (HCA), American Express Company (AXP), ColgatePalmolive Company (CL)).
TIP OF THE WEEK:
Sell old stuff to fund a new experience. Sell what you don't need online or at a yard sale and use the proceeds to partly or fully fund a vacation, an education, or an adventure.
The Wall Street Journal, January 20, 2023
The Earnings Scout, January 19, 2023
Census.gov, January 18, 2023
Posted in Economy, Financial Planning, Market Watch, Retirement Planning, Taxes, Wealth Advisor, Weekly Economic Update
Madison Luck
← Weekly Economic Update: January 19, 2023
For more information about any of the products and services listed here, schedule a meeting today or register to attend a seminar.
Register For a Seminar
Or give us a call at (404) 890-5606