Dow Jones, Nasdaq, S&P 500 weekly preview: Fed, Apple and NFP in spotlight
The bears had a relatively easy time last week as high yields, ongoing geopolitical risks, strong economic data, and, most importantly, disappointing earnings all worked in their favor.
“Healthy earnings season could have provided air cover for stocks to withstand the macro turmoil, but instead EPS reports compounded the market’s doubt and pain,” analysts at Vital Knowledge wrote in a report.
The S&P 500 sank 2.5% to hit fresh 5-month lows. The index is now testing below the key support near 4200 and the 100-WMA that sits around 4180.
Similarly, the Dow Jones Industrial Average lost 2.1% to close below the descending trend line that connects lower highs. The next support is the 200-WMA near 31800.
Finally, the Nasdaq Composite Index fell 2% as Amazon’s (NASDAQ:AMZN) rally on Friday helped the tech-heavy index to pare some losses from earlier in the week. The index previously touched the 100-WMA for the first time since May this year.
Looking forward to this week, the two key catalysts are the FOMC decision on Wednesday and Apple’s (NASDAQ:AAPL) earnings report on Thursday after market close. Moreover, investors will look forward to the Bank of Japan’s decision on Tuesday, the Eurozone CPI for October, and the Bank of England event on Thursday. The busy week will conclude with the U.S. jobs report for October on Friday.
For earnings, investors will be watching the following reports closely: Monday — McDonald’s (NYSE:MCD); Tuesday — Caterpillar (NYSE:CAT), Pfizer (NYSE:PFE), AMD (NASDAQ:AMD); Wednesday — CVS Health (NYSE:CVS), Qualcomm (NASDAQ:QCOM), PayPal (NASDAQ:PYPL); Thursday — Eli Lilly (NYSE:LLY), Starbucks (NASDAQ:SBUX), and Apple.
Earnings season in full swing
Around half of the S&P 500 companies reported so far,
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