The Bulls are in Charge to Start 2023 Image: Bigstock This is Senior Stock Strategist, Tracey Ryniec, filling in for Kevin today. The stock bulls continue to be in charge, as the major large cap indexes rose again yesterday. All three of the big cap indexes are in the green to start the year, which, historically, has been a good sign for the full year. But that doesn't mean the road won't be rocky. Wall Street awaits the December CPI which will be out tomorrow at 8:30 am eastern time. All it needs to do is fall further and it could light a fire under stocks as that will bring the Fed closer to pausing or pivoting. Either one of those will work for Wall Street. In fact, Wall Street is already believing that a soft landing may actually be achieved. It believes that the Fed could tighten dramatically, crush speculation in some asset classes like housing, stocks and bitcoin, but the US economy wouldn't tank but would only slow. That's the goldilocks scenario. When the Fed DOES pause its rate increases, it will be a huge catalyst for stocks. Could the bulls be pricing it in already? What I'm Watching with Earnings this Week Earnings season starts this week with the big banks, Delta Airlines, and UnitedHealth Group all reporting. While there have been some earnings warnings, especially in retailers who have been providing updates about the holiday season, it's been relatively quiet. A key earnings report to watch this week is home builder KB Home. It reports earnings tonight, after the bell. With the housing market cooling due to high mortgage rates, KB Home's earnings are expected to fall this year. But don't tell Wall Street. The shares are up 25% over the last 3 months on the belief that the worst is already priced in in housing. I'll be tuning in on KB Home, and all the other home builders, this earnings season. Housing is a key component of the US economy. If sales bounce back this spring, that's a good sign that goldilocks could be achieved. Happy investing, Tracey Ryniec Stock Strategist, Zacks Investment Research |
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