Earnings, the Yen and Other Key Things to Watch This Week

Apple (AAPL) came out last week with an announcement of a massive $110 Billion share buyback that sent prices higher in the session after earnings. This, however, was offset by some less-than-ideal sales numbers for the iPhone and Mac market segments. 

The Fed also kept rates stable, citing that inflation has not yet moved to an area where they felt comfortable cutting, but were still fairly confident cuts would happen this year. After volatility subsided after the news, markets were bid up closing Friday around the highs of the week.

This week is relatively quiet on the news front, but there are still earnings due out and plenty of other macro factors to watch.

Here are 5 things to watch this week in the Market.

Earnings

While earnings are still in full swing, the number of reports coming out that have the potential to really move the market is limited. Walt Disney (DIS) is out Tuesday, and watching how they report on theme park data could be a tip-off as to how the American consumer is handling higher rates. A large decline in park attendance could be a foreshadowing of how the economy will fare in the next few quarters. 

In a similar vein, Shopify (SHOP) is out Thursday and its main customer base is online retailers. If they also see a slowdown in usage, revenue, and visits it could be continued evidence that the economy is softening. 

Finally, there are several Oil/Gas companies reporting through the week, with Duke Energy (DUK), BP plc (BP), and Energy Transfer (ET) being some of the larger ones. The earnings will be important if you are holding energy-heavy ETFs or the individual names, but what would be more important is how they see energy prices in the coming quarters. These have a direct effect on the consumer and economy. 

The YEN

As was noted in a prior issue, watching the USD/JPY currency pair can be a good way to gauge market possibility for the week. As the pair moves higher, this can apply pressure to both US equities and Treasuries creating some selling pressure. The Yen retraced most of its recent breakout last week, but if it continues to climb this week, it could put some pressure on the SPY.

FOMC Speakers

There is not one particular member speaking this week that is of greater concern than the others, but there are several speeches planned throughout the week and whenever they start talking about rates the markets start to react. With the most recent inflation and jobs data not looking positive, these speeches could cause some volatility.

10 Year Auction

Wednesday at 1:01 pm EDT the 10-year bond auction reports. The last several auctions have been trending in a direction that could be seen as investors getting concerned. Rate and Bid-to-cover ratios were not as strong as they have been in the past auctions. If we have another weak auction it could spill over and cause some fear in the equities markets as well.

30 Year Auction

Thursday at 1:01 PM is the 30-year auction and similar to the 10-year, these have been trending in a less than positive direction. If this trend continues this could also have an impact on the equities market as the 30-Year Treasury is often thought of as the gold standard for a risk-free rate of return.

Best of luck this week and don’t forget to check out my daily options article.