US Markets Quiet After Inflation Data
US markets had a relatively quiet day on Friday after inflation data came out largely on expectation, the PCE Price Index dropping to its slowest annual pace in nearly three years. In stocks, the Dow Jones lost 0.16%, the S&P 0.07% and the Nasdaq dropped 0.36%. US treasury yields moved high again as supply concerns outweighed the data print, the 2-year closing up 4.7 basis points at 4.36% and the 10-year gained 2.7 basis points to trade at 4.16%. The dollar was little changed on the day, the index dropping just 0.1% as currencies remained in recent ranges. Gold also remained at familiar levels on Friday, closing around the $2,018/oz level, although traders are expecting further moves today after more attacks in the middle east over the weekend. Oil jumped to hit its highest level in 8 weeks on demand optimism but it’s a similar position to Gold and may gap on the open after the escalation of hostilities in the Red Sea.
Earnings Data in Focus this Week
It is a huge week ahead for investors with a plethora of key data releases, interest rate updates from both the Federal Reserve and the Bank of England and massive earnings updates from five of the “Magnificent Seven” tech stocks in the US. Across the course of the week, we have earnings updates from Alphabet, Microsoft, Apple, Amazon, and Meta Platforms, and as these five make up nearly 25% of the S&P 500 we could be looking at very different levels for the index by the end of the week. In general, companies in the S&P are reporting earnings around 4.2% above expectations and investors will be expecting similar if not better results from the big boys, if this is the case expect the S&P to continue to hit new highs as we progress through Q1.
Quiet Day Before a Storm of a Week
Traders looking at the event calendar today would be forgiven for expecting a quiet start to the week and anticipating another rangebound session in the Asian session. However, an escalation of hostilities in the Middle East has already seen some swift moves in Oil and Gold on the open, Gold jumped to levels above $2,027 already after closing near $2,018 on Friday. There is little else on the event calendar over the rest of the day’s trading, but it is very much the calm before the storm as data comes thick and fast in the next few days and we get the much-anticipated rate call from the Fed late on Wednesday.
