Key Week Ahead: Fed, Tech Earnings, and Government Funding Dominate Market Outlook
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The upcoming week is poised to be a pivotal one for markets, with a confluence of major events set to drive volatility and investor sentiment. From a crucial Federal reserve policy meeting and a flurry of tech earnings reports to a looming government shutdown deadline,investors will have no shortage of catalysts to navigate.
The stock market concluded Friday on a mixed note, extending a two-week losing streak for both the S&P 500 and nasdaq Composite. The Dow Jones Industrial Average fell 0.5% for the week, while the S&P 500 dipped approximately 0.4%.The tech-focused Nasdaq declined marginally, less than 0.1%, and the Russell 2000 shed 0.3%.
Federal Reserve Policy Meeting Takes Center Stage
All eyes will be on the Federal Reserve’s policy meeting on Wednesday. While the central bank is widely expected to hold interest rates steady, the post-meeting press conference with Fed Chair Jerome Powell carries significant weight. “Powell could rock the stock market,” according to one analyst, as investors will be scrutinizing his remarks for clues about the future path of monetary policy.
Beyond the Fed, several key economic reports are scheduled for release. Durable goods orders data will be released on Monday, followed by The Conference Board’s Consumer Confidence Index reading for January on Tuesday. the producer price index report for December is slated for release on Friday.
Tech Earnings Season Heats Up
The earnings season is gaining momentum, with a heavy focus on the “Magnificent Seven” tech giants. Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA), and Meta Platforms (NASDAQ:META) are all scheduled to report earnings on wednesday evening, while Apple (NASDAQ:AAPL) will release its results late Thursday.
Thes mega-cap companies will be joined by a host of other prominent names,including IBM (NYSE:IBM),and intel (NASDAQ:INTC).Apple’s recent performance has been strong, with the stock hitting all-time highs, fueled by optimism surrounding its growth prospects.
A Sell Ahead of Earnings
In contrast to Apple, Starbucks enters its earnings report on Wednesday with a more precarious outlook. The coffee giant is grappling with slowing same-store sales growth, increased competition, shifting consumer preferences, and rising costs.
Analysts have grown increasingly bearish on Starbucks, with 17 of 19 surveyed by investingpro revising EPS estimates downward over the past three months. Wall Street anticipates a challenging quarter, with EPS expected to decline 15.9% year-over-year to $0.59, despite a modest 2.5% revenue increase to $9.62 billion.
The stock,which has surged approximately 16% year-to-date,closing at $97.62, appears overextended. A break below pivot support at $96.25 could target $90 amid potential earnings disappointment.
Trade Setup:
- Entry: $98 (pre-earnings)
- Target: $90 (gain ~8%)
- Stop-Loss: $103 (risk ~5%)
Investors seeking to capitalize on market opportunities can explore features like ProPicks AI and advanced stock screeners offered by InvestingPro, currently available with a 55% discount.
Disclaimer: This is not financial advice. Always conduct your own research.
The author is currently long on the S&P 500 and nasdaq 100 via the SPDR® S&P 500 ETF and the Invesco QQQ Trust ETF, respectively, and also holds a position in the Technology Select Sector SPDR ETF. Portfolio rebalancing is conducted regularly based on macroeconomic and company financial assessments. The views expressed are solely those of the author and should not be considered investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for further stock market analysis and insights.
