Medicare Agent News: Stocks Hit a Wall

Monday, January 30, 2023

Stocks Hit a Wall

By Nicholas Jasinski Monday, January 30

Anticipation. There was nowhere to hide in markets today, with stocks and bonds declining in unison in a broad slump. Investors appear to be holding their collective breath ahead of a packed week of micro and macro developments—earnings reports, a Federal Reserve decision, and key economic data.

The Dow Jones Industrial Average broke a six-day winning streak with a loss of 0.8%, as the S&P 500 fell 1.3% and the Nasdaq Composite dropped 2%. Bond yields, which move inversely to prices, rose across the curve.

But that all comes after a roaring start to the year: The Nasdaq is still up almost 9%, the S&P 500 has added 5%, and the Dow has gained 2%. That's as bond yields have declined year-to-date and their prices have risen.

More than a third of the S&P 500 has reported fourth-quarter results this month, with earnings for the index so far coming in 3% lower than in the same period a year ago. When you exclude the energy sector—which saw its income soar in 2022—S&P 500 earnings are down 7% year over year, according to data from Refinitiv.

Roughly 100 S&P 500 companies are scheduled to report this week alone, including Exxon Mobil, General Motors, and Pfizer tomorrow, then Meta Platforms and T-Mobile US on Wednesday. Thursday will be a busy day: Alphabet, Amazon.com, Apple, Ford Motor, and Starbucks all report.

Amidst that deluge of earnings reports, the Federal Open Market Committee will issue its first monetary policy decision of 2023 on Wednesday afternoon. The central bank is widely expected to raise the federal-funds rate by a quarter of a percentage point, to a target range of 4.50% to 4.75%. As always, the post-meeting press conference with Chairman Jerome Powell will be a must-watch event for investors and economists.

The conversation will then quickly turn to the Fed's next move, with a pair of key labor-market indicators out later this week. On Wednesday, the December job openings and labor turnover survey, or JOLTS, will provide a glimpse at the supply side of the U.S. job market. Things are expected to have softened slightly from November, but not by much.

Then there's jobs Friday. Economists are forecasting an increase of 190,000 nonfarm payrolls in January, following December's 223,000 rise. Last month's report set off a market rally after coming in not too hot and not too cold. Another figure around 200,000 could be right back in that goldilocks zone.

Markets are already sitting on solid year-to-date gains, and the optimistic view seems more-than priced in. We'll know a lot more by the end of this week than we do now. No wonder stocks hit a wall today.