Retail Sales and Fed Speakers Set to Drive Market Focus
U.S. stocks ended the week on a relatively flat note as investors turned their attention to the release of fourth-quarter earnings and continued to parse the Federal Reserve’s monetary policy plans. Despite the lackluster performance on Friday, all three major indices posted weekly gains, with the S&P 500 recording its best weekly performance since mid-December and the Nasdaq experiencing its biggest weekly gain since early November.
This coming week, investors will closely watch the release of Q4 earnings from notable names such as Goldman Sachs, Morgan Stanley, PNC Financial, Charles Schwab, and Interactive Brokers. Alongside the earnings reports, key economic indicators such as retail sales, housing data, and the Philadelphia Fed manufacturing survey will influence market sentiment.
Moreover, the market will also be paying close attention to a series of speeches from Federal Reserve officials, including district governors Christopher Waller and Michelle Bowman, as well as New York Fed President John Williams. With an 80% chance of a 25-basis point rate cut in March, according to the Investing.com Fed Rate Monitor Tool, the market will be seeking further clarity on the Fed’s monetary stance and the potential impact on markets.
Goldman Sachs: Strong Earnings Point to Buying Opportunity
Goldman Sachs is expected to release its financial results for the fourth quarter before the opening bell on Tuesday. Market participants anticipate that the Wall Street powerhouse will beat consensus forecasts due to improved performance in its investment banking unit, wealth management services business, and increased deal-making and IPO activity. After declining 4% following its last earnings report, Goldman Sachs’ shares have the potential to rebound as earnings are expected to reflect a return to profit growth. Positive results are projected to drive a 3.4% year-over-year increase in revenue to $10.95 billion. With a positive outlook for the recovery in global deal-making and IPO underwriting, Goldman Sachs CEO David Solomon is likely to strike an upbeat tone for the upcoming months.
Morgan Stanley: Weak Profit and Sales Growth Signal Selling
On the other hand, Morgan Stanley’s fourth-quarter earnings announcement scheduled for Tuesday is expected to disappoint investors. The investment banking giant is anticipated to report weak performance across its key business segments, including its wealth management and investment banking divisions. Analysts have revised their EPS estimates, reflecting a 38.1% drop from their initial profit forecasts. With a projected decrease in earnings per share of 16.8% from the year-ago period, Morgan Stanley faces multiple near-term headwinds. The company’s new CEO, Ted Pick, may exhibit caution in forecasting net income growth due to the struggles the bank faces in a mixed business environment.
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Economic Calendar Highlights: Earnings, Retail Sales, and Fed Speakers
The economic calendar for the week includes key events that will shape market sentiment. Besides eagerly anticipated earnings reports, traders will focus on retail sales data, housing data, and the Philadelphia Fed manufacturing survey to gain insights into the health of the economy. Additionally, a slate of speeches from Federal Reserve officials, including Christopher Waller, Michelle Bowman, and John Williams, will influence market expectations regarding potential rate cuts and the central bank’s overall monetary policy direction. By monitoring these events, investors can identify potential market moves and position themselves accordingly.
In conclusion, the week ahead promises to be eventful, with earnings reports, economic data releases, and speeches from Federal Reserve officials taking center stage. While Goldman Sachs is expected to deliver strong earnings, Morgan Stanley faces challenges in its profit and sales growth. Investors can make the most of the volatile market environment by accessing actionable trade ideas through InvestingPro and staying informed about key economic events.
Analyst comment
Positive news: Goldman Sachs is expected to release strong earnings, leading to a potential rebound in their shares. Negative news: Morgan Stanley’s earnings are expected to disappoint investors. Market analysis: The market will be driven by earnings reports, key economic indicators, and speeches from Federal Reserve officials. Investors can navigate market volatility and capitalize on opportunities by accessing actionable trade ideas through InvestingPro.
