Last week the Fed held steady at the current funds rate and the market started to sell off on the news that rate cuts may not be coming as soon as they anticipated. This was a sentiment that was further echoed when the rest of the data expected last week came in much hotter than expected. 

Also coming in hotter than expected were the Amazon (AMZN) and Meta Platforms (META) earnings. Amazon finished the week up almost 8% and Meta closed up 20% on the week. This mixed with some banking news later in the week helped the S&P 500 ($SPX) (SPY) to rally into Friday closing up well over a percent on the week and over the $495 mark. We are almost at $500!

This week we still have earnings to keep an eye out for, a few pieces of economic data, and some fed speakers.

Here are 5 things to watch this week in the Market.

Earnings

Many of the potential market-moving earnings calls are behind us now, especially with Apple as it is one of the highest weighted stocks in the S&P500. We do still have some important earnings coming up this week though, Monday starts with McDonald's (MCD) and Caterpillar (CAT) both due out before the market opens. Caterpillar's guidance could be of particular importance with all the talk about housing. Several sources are stating that this could be a year for a construction boom and if Caterpillar guides well, it could confirm that narrative. 

Wednesday is another stacked day for earnings with Alibaba (BABA), Disney (DIS), Uber (UBER), CVS (CVS), and PayPal (PYPL) all reporting. Alibaba is a Chinese name and they have been catching a lot of selling lately, if they have a positive report and good guidance it could start to turn them around as a sector. Paypal has been in the news recently with layoffs and new payment features and this could be a chance to further boost some of the positives at the company, especially if they end up beating estimates.

ISM Services

ISM Services is due out Monday at 10 am and given how positive all of the news was last week this could really move the market. If this comes out hotter than expected and shows growth in the services sector, then it could be seen as a negative and that higher rates are needed. If it comes in cooler than expected it could be seen positively by the market in the hopes that we could see rate cuts this year.

FOMC Speakers

There are several Fed speakers throughout the week and keeping an eye on what they say could be important. Fed Fund Swaps have lowered the odds of a cut in March after last week's blowout Jobs number. If they confirm this sentiment, we could see some selling in the market. If however, they come out and say that cuts are still on the table we could see the market rally on the positive news. 

Unemployment Claims

Usually, this is a moderately important release that happens weekly, but with the quality of the news on last week's Non-Farm Payroll report, it's possible that unemployment really moves the market. We appear to be in a Bad News is Good News regime currently so if these come out poorly we could see the market rally. The opposite could happen if unemployment comes in better than expected.

Tensions in the Middle East

The Gaza - Israel ceasefire looks like it will not be happening now unfortunately, and tensions and attacks are continuing to rise in the Middle East around the Red Sea shipping route. All of these things together could have a detrimental impact on oil prices and shipping prices leading to a cascade effect in the market. Additionally, if the US decides to get involved in a more official capacity, then it could also move the markets.

Best of luck this week and don’t forget to check out my daily options article.

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