Another trading week has begun, and we are excited to delve into the latest financial and stock market news. We will provide a comprehensive overview of the most significant events shaping the markets this week and an in-depth analysis of the previous week's developments. Additionally, we will discuss three stocks that must be watched this week. So you can stay ahead of the curve.
It is crucial to acknowledge that the information shared in this article is for educational and informational purposes only and should not be treated as financial advice. We encourage you to conduct your own research and seek guidance from a financial advisor before making any investment decisions.
With that, let's dive into the exciting world of stock market news and analysis!
Recap of Last Week:
Last week's news saw U.S. stocks end lower, with the tech-heavy Nasdaq Composite leading the losses.
The Nasdaq rose for a fifth straight week, marking its longest weekly winning streak in months. The stock prices were volatile as investors reacted to a stronger-than-expected jobs report and some tech sector earnings that missed expectations.
The U.S. economy added 517 000 jobs in January, and the unemployment rate fell to its lowest since 1969. However, the strong jobs report raised concerns about the Federal Reserve's interest rate hikes and their economic impact.
The Nasdaq rose 3.3% for the week and 14.7% for the year, while the S&P 500 rose 1.6% for the week and 7.7% for the year.
Fed-fund futures indicate that traders expect the Fed to increase interest rates in March and May, bringing the peak in interest rates closer to the Fed's forecast. Despite the initial reaction, some experts argue that the strong jobs report is a positive sign for economic growth and inflation, with consumer demand and supply improving.
The Nasdaq snapped a 3-day win streak after heavy tech companies reported disappointing results. Shares of Amazon (AMZN), Alphabet (GOOG), and Apple (AAPL) saw mixed results, with Amazon reporting its worst annual loss and Alphabet reporting weaker advertising spending.
Some are worried that stocks have risen too fast, while others see the Federal Reserve's tightening monetary policy as driving tech stocks higher.
So we saw some significant movements in the indexes and commodities markets this week. Crude prices dropped 7% on the energy front, with Brent dipping below the $80 mark and WTI in the low $70s. This was largely due to a strong U.S. jobs report in January that strengthened the dollar, leading to some pressure on commodities.
In the precious metals sector, we also saw a significant dip in gold prices. After a robust jobs report, profit-taking led to a drop of nearly 3% on Friday, putting gold far from the $2,000 per ounce target that was being considered by those in the industry.
Upcoming Market-Moving Events.
As we move forward into the coming week, it's time to turn our attention to the most significant events on the horizon. We will now look at the most important events this week.
This week is expected to be quieter on the economic front, but there's still plenty for markets to consider after last week's events. The Federal Reserve raised interest rates, and the U.S. nonfarm payrolls report was unexpectedly strong.
This week, earnings season continues with media and consumer stocks in the spotlight, the Reserve Bank of Australia is set to raise rates again, and data from the Eurozone and the U.K. will be closely watched.
First up, Fed Chair Jerome Powell will be speaking on Tuesday after the strong U.S. jobs report last Friday. Investors will pay close attention to Powell's speech as they fear that the Fed's aggressive rate hikes may lead to a recession. Additionally, there will be updates on the labor market with the release of the initial jobless claims numbers on Thursday. Several other Fed officials will also be speaking throughout the week.
Next, earnings season continues, with media and consumer industry stocks taking center stage. Companies like Walt Disney (DIS), News Corp (NWSA), and The New York Times (NYT) will be reporting their earnings this week, offering insight into how these industries are doing.
So far, S&P 500 earnings are expected to have declined 2.4% in the fourth quarter from a year ago.
Central banks are also in the spotlight this week. The Reserve Bank of Australia is expected to raise rates again, and the Reserve Bank of India may also raise rates by 25 basis points on Wednesday.
Meanwhile, comments from European Central Bank officials will be closely watched after they raised rates last Thursday. Germany will release inflation data on Thursday, and the U.K. is set to release GDP data on Friday, which is expected to show that the economy avoided a recession.
3 Hot Stocks to Watch This Week:
Now that we've discussed the current market trends let's take a closer look at the top 3 hottest stocks making waves on StockInvest.us.
On February 3rd, 2023, Tesla's (TSLA) stock price rose by 0.91%, from $188.27 to $189.98. This marks the 5th consecutive day of gains for the stock, following an increase in demand and the Biden administration's decision to relax regulations on electric vehicle tax credits. The changes made by the federal government mean that more electric vehicles will now qualify for a $7,500 tax credit.
Mullen Automotive (MULN) also saw a significant increase on Friday, February 3rd, 2023, with a 7.06% rise in stock price from $0.381 to $0.408. Despite its relatively small size, MULN stock has become a widely followed name in the EV industry. However, it differs greatly from other larger, more well-known EV stocks, not just in terms of market capitalization.
On the other hand, Amazon (AMZN) experienced a rough day on Friday, February 3rd, 2023, with an 8.43% drop in stock price from $112.91 to $103.39. The stock fluctuated throughout the day, with a 6.11% range, from $102.52 to $108.78. The company had a challenging 2022, with its biggest loss recorded and its first workforce decreased in 20 years. According to Amazon's 2022 annual report, the company had 1,541,000 full and part-time employees as of December 31st, 2022, a 4.2% decrease from the previous year. This marked the first decline in the workforce since the dot-com bust, with staff cuts in 2001 and 2002. Amazon's stock, AMZN, saw a 49.6% decrease in 2022, the largest yearly loss since the 79.6% drop in 2000.
Stock bulls are encouraged by various signals that suggest a positive year for Wall Street.
Despite concerns that the Federal Reserve's monetary policy may cause a recession, equities are holding significant gains. Key indicators include a positive January performance, a golden cross pattern on the S&P 500, and more stocks reaching new highs rather than new lows.
However, weak outlooks for major corporations such as Amazon (AMZN) and Microsoft (MSFT) and a strong employment number that raised expectations for Fed hawkishness added uncertainty to the market.
Nevertheless, recent improvements in momentum and sentiment gauges reinforce the view among some investors that asset prices may be headed for a more stable period.
The S&P 500 rose 6.2% in January, driven by hopes that the Fed will be able to control inflation without hurting the economy. The S&P 500 had risen 83% of the time in the subsequent period, with an average 11-month gain of over 11% when it advanced in January. The golden cross pattern, where the S&P 500's 50-day moving average rose above its 200-day moving average, also adds to the growing technical evidence of a trend change for the S&P 500.
Additionally, five bull market indicators were fulfilled in January, including indicators of upside volume and risk appetite. However, some investors believe that stocks may have moved too fast. The employment report showed sharp U.S. employment growth in January, reigniting inflation concerns and bets on a more hawkish Fed.
Remember to keep an eye on a stock's fundamentals, financial health, industry trends, and any relevant information or events that may impact the stock price.
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