Pre-Markets Open in Red on Recession Fear
We’re starting slowly this week, following a consequential week that saw not only a huge monthly jobs number and the lowest unemployment since 1969, but also saw another Fed interest rate increase — this time +25 bps, indicating this era of rate hikes is grinding to a close. Stocks sold off in the Friday session, but were up for the week overall.
This morning, pre-market futures look to continue selling these recent profits. With no economic prints ahead of the opening bell — and Q4 earnings season still strong but with most marquee names in the rearview mirror — the Dow is -180 points at this hour, the S&P 500 is -30 and the Nasdaq, which has outperformed the field year to date, is -110 points currently.
Even the economic indicators expected this week are of a slightly muted variety: International Trade Deficit, Consumer Credit, Wholesale Inventories, Jobless Claims and the University of Michigan Consumer Sentiment survey are all important, but are less likely to move markets -- especially compared to last week’s Fed meeting and labor force numbers.
Next week, we pick it up a little heavier again: January Consumer Price Index (CPI) and Producer Price Index (PPI) numbers, Empire State and Philly Fed surveys, Industrial Production and Capacity Utilization productivity prints, Housing Starts and a new homebuilders’ survey all await us. Currently, the narrative is a “soft landing” for the economy is coming into view; we’ll see if we still feel that way after next week.
Tyson Foods TSN is out with fiscal Q1 earnings this morning, missing on the bottom line for the second-straight quarter: 85 cents per share was -37% beneath the $1.35 expected in the Zacks consensus, -70% from Q1 totals a year ago (which were, admittedly, historically good). Softer demand lowered meat prices while feedstock remained expensive. Shares are -5% in early trading.
Earnings later this week have some household names: Chipotle CMG on Tuesday and Walt Disney DIS Wednesday, to name just a couple. PepsiCo PEP and PayPal PYPL await us on Thursday. For the S&P, we’ve recently completed its fourth positive week in the past five; these numbers coming in complimentary to this soft-landing scenario may help our 2023 winning streak (so far) keep heading in the right direction.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Tyson Foods, Inc. (TSN) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
