Earnings season is underway for big banks

With markets closed for Dr. Martin Luther King Jr.’s 94th birthday yesterday, we take the opportunity to look forward to what’s most important on the investment agenda. It turns out that there is a lot to do in this holiday-shortened week, from the main economic releases to big names publishing their fourth quarter results.

Perhaps the biggest of these economic reports this week will come on Wednesday when Retail sales for December. Direct inflation indicators are slightly larger than monthly retail sales and we expect a decline of -1.0% last month, following a decline of -0.6% the month before. Also the finale Producer Price Index (PPI) December results announced also on Wednesday, they are expected to be -0.1% from the previous +0.3%.

And this is just for starters: State of the Empire A survey of the manufacturing sector is expected tomorrow and Industrial production/capacity utilization it’s on Wednesday. And later Fed in Philadelphia The survey arrives on Thursday and paints a decent picture of our production, both regionally and nationwide. In the case of housing, it exists Home Builders Index Wednesday, Takeoffs and permits on Thursday and Existing Home Sales Friday. Employment will be registered on Thursday Weekly applications for unemployment benefits AND Continuous claims.

That’s before I mention Q4 earnings season, which is underway before next week’s wide open: Wall Street investment houses Goldman Sachs GS i Morgan Stanley MS is tomorrow, airlines United UAL i American AAL is Tuesday and Thursday respectively, Procter & Gamble PG is also Thursday, as is the streaming giant Netflix NFLX. You could say it’s going to be a full week.

We will also hear from some of the voting members Federal Open Market Committee before the next Fed meeting, which starts two weeks from tomorrow. There is a pause period in the week before the Fed meets to decide on new interest rate levels, so if there is anything significant, it will likely surface this week as well. Already last week we heard our first consideration that there might be a 25 basis point increase in interest rates on February 1, not the 50 basis points we talked about at the last meeting, or the 75 basis points at the previous four.

Markets have had strong gains over the past five sessions, led by the small-cap Russell 2000, which has gained +4.9% over that period. Over the same period, the tech-heavy Nasdaq gained +3.9%, followed by the S&P 500 +2.3%. At the back is the largest Dow Jones index, which has outperformed all major indexes in 2022, +1.7% in the last five trading days. Economic reports and Q4 earnings reports will have a lot to say about where these trajectories are heading.

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