Last week:
Stocks closed out the first week of 2023 in rally mode while U.S. Treasury yields and the dollar fell sharply after December's employment report showed strong hiring and a historically low jobless rate combined with cooling wage growth, and the Institute for Supply Management's services gauge showed a greater than expected slowdown. While headline jobs numbers pointed to ongoing strength in the labor market, the report also included signs of potential softening, including slowing wage growth. This opened the door for some bargain-hunting trades. Investors seized upon the data as indicating the Federal Reserve's rate hikes may be succeeding in slowing the economy, and a sense that the central bank may not be able to take its target range for the Fed funds rate much higher before it decides to hit the pause button.
Earning ahead:
The corporate calendar will have its first busy week of the year with the ICR Conference in Orlando and JPMorgan Healthcare Conference in San Francisco expected to see waves of earnings pre-announcements and guidance updates. Meanwhile, the earnings season officially kicks off on Friday with major banks and financial institutions stepping into the earnings confessional. Wells Fargo (WFC), JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C) and PNC Financial Services Group (PNC) are all scheduled to release quarterly results. Also watch the airline sector with monthly traffic reports due in and Delta Air Lines (DAL) to lead off the earnings season at the end of the week.
Economic reports in the week ahead:
Inflation will be in the spotlight this week with the CPI report for December due out on January 12. Bank of America expects both core goods and energy prices to have declined again in December, but food inflation and core services inflation to have remained stickier. The focus from market watchers will be if the CPI update alters the consensus view that the Federal Reserve will hike interest rates by 50 points in February and another 25 points in March before going on hold at a terminal rate of 5.0% to 5.25%.
Chart: SPX daily
Chart: QQQ daily
Chart: DIA daily
From tech side of analysis, DIA is the strongest among all three major indices and still holding up 326ish level. However, DIA 343ish looks solid and I didn't expect this will break in short-term specially with so many uncertainty factors and majority economy environment. I expect DIA will move along side-way in the following week until CPI releases.
Chart: SPX 15 mins
Even though I am overall bullish on markets. However, on a 15 mins basis, SPX will face 3900ish short resistance level at the market open, and 21 EMA daily possibly will provide some support for SPX but I personally do not think the market can be that strong. If the market can find some support around 3850ish, that will be the best catch for long side daytraders.
Please feel free to express your ideas and thoughts in the comment section.
Stocks closed out the first week of 2023 in rally mode while U.S. Treasury yields and the dollar fell sharply after December's employment report showed strong hiring and a historically low jobless rate combined with cooling wage growth, and the Institute for Supply Management's services gauge showed a greater than expected slowdown. While headline jobs numbers pointed to ongoing strength in the labor market, the report also included signs of potential softening, including slowing wage growth. This opened the door for some bargain-hunting trades. Investors seized upon the data as indicating the Federal Reserve's rate hikes may be succeeding in slowing the economy, and a sense that the central bank may not be able to take its target range for the Fed funds rate much higher before it decides to hit the pause button.
Earning ahead:
The corporate calendar will have its first busy week of the year with the ICR Conference in Orlando and JPMorgan Healthcare Conference in San Francisco expected to see waves of earnings pre-announcements and guidance updates. Meanwhile, the earnings season officially kicks off on Friday with major banks and financial institutions stepping into the earnings confessional. Wells Fargo (WFC), JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C) and PNC Financial Services Group (PNC) are all scheduled to release quarterly results. Also watch the airline sector with monthly traffic reports due in and Delta Air Lines (DAL) to lead off the earnings season at the end of the week.
Economic reports in the week ahead:
Inflation will be in the spotlight this week with the CPI report for December due out on January 12. Bank of America expects both core goods and energy prices to have declined again in December, but food inflation and core services inflation to have remained stickier. The focus from market watchers will be if the CPI update alters the consensus view that the Federal Reserve will hike interest rates by 50 points in February and another 25 points in March before going on hold at a terminal rate of 5.0% to 5.25%.
From tech side of analysis, DIA is the strongest among all three major indices and still holding up 326ish level. However, DIA 343ish looks solid and I didn't expect this will break in short-term specially with so many uncertainty factors and majority economy environment. I expect DIA will move along side-way in the following week until CPI releases.
Even though I am overall bullish on markets. However, on a 15 mins basis, SPX will face 3900ish short resistance level at the market open, and 21 EMA daily possibly will provide some support for SPX but I personally do not think the market can be that strong. If the market can find some support around 3850ish, that will be the best catch for long side daytraders.
Please feel free to express your ideas and thoughts in the comment section.