Dip buyers were back with a vengeance this week with S&P 500 ($SPX) (SPY) closing the week up almost 6%. Tesla (TSLA) and Nvidia (NVDA) also had fantastic weeks closing up 6% and 11% respectively. Outside of the Fed, perhaps the biggest news last week was the Apple (AAPL) earnings report. While they reported a top and bottom line beat, shares traded lower on Friday on another slowdown in sales. Apple being one of the largest component pieces of the S&P led to a lot of speculation about what it could mean in the long term.
This week looks to be a little less eventful than last week, but there are still plenty of things to go and watch out for. We have more earnings on deck, Powell talking again, Rising tensions in the Middle East, and plenty of other news. Here are five things to watch in the market this week.
Earnings
Tuesday morning we have Uber Technologies (UBER) out before the market opens. The ride-share giant could give us an insight into how the economy is truly working by looking at some of the metrics inside their report and by watching their forward guidance. Wednesday Disney (DIS) reports after the close and after a tough quarter with streaming and park attendance this report could be very telling.
Powell Speaking
Powell is due to speak both Wednesday and Thursday this week at different events around Washington DC. Anytime Powell speaks there is a risk for higher volatility in the market, especially recently as rate decisions become more and more important.
Rising Tensions
Tensions continue to rise not just in the Middle East, but also around the world as the conflict between Israel and Gaza continues to amplify. As each side continues to call on their potential allies, the possibility of a larger conflict could be rising. If that were to happen, we may start to see markets sell-off and oil rally. Any conflict between OPEC and the West could be bad not just for the markets but for consumers in general as they could use oil production as a key bargaining chip.
10 Year Auction
Rates never really left the public discourse, but now several cuts are being priced into the 2024 market. To look for potential confirmation of this, it would make sense to start to watch the Bond Auction results, specifically the 5 Year and longer for clues of potential cuts. Looking for how the Bid to Cover compares to previous auctions is a simple way to look for bond auction health. What you want to see is an increase or stability over time.
Unemployment Change
Finally, keep an eye out on the Unemployment Change this week that is due out Thursday morning. This has been steadily revised higher, which is in line with things like Non-Farm Payrolls and labor participation being revised lower. With data coming out so mixed lately, the Fed stating that current economic conditions are a reason to continue to pause, keeping an eye on unemployment could help provide some insight into where the overall economy is heading.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
