Estimated read time: 3 minutes
Publication date: 7th Mar 2023 22:11 GMT+1
After a four-week losing streak, the Dow Jones Industrial Average gained 1.8% last week, while the S&P 500 and Nasdaq rose 1.9% and 2.6%, respectively, in the last five trading sessions.
Equity markets gained pace on Friday as treasury yields inched lower from recent highs.
The yield on the 10-year treasury note moved below 4%, which was a key trigger for Wall Street. This rate impacts mortgages as well as car loans, so if the yield breakouts, it could easily create a ripple in the U.S. economy.
In an interview with CNBC, Yung-Yu Ma, a Wealth Manager and Chief Investment Strategist with BMO, stated, “The stock market is very sensitive to bond yields at this point and looking for some respite to the recent upward moves in yields. There’s a nervous anticipation to upcoming data releases for jobs and inflation after the difficult readings last month. The market is unlikely to have sustained traction until data points resume a cooling trend.”
Let’s see if the S&P 500 index will continue to gain pace in the upcoming week and what the investors should expect right now.
CrowdStrike earnings expected this week
Cyber-security company CrowdStrike (NASDAQ: CRWD) is scheduled to announce its fiscal Q4 of 2023 earnings (ended in January) on March 7. Analysts tracking CRWD stock expect the company’s revenue to rise by 45% year over year to $625 million. Comparatively, its adjusted earnings are forecast to rise by close to 50% to $0.43 per share in the January quarter.
Down 50% from all-time highs, CRWD stock is valued at a market cap of $29.5 billion. CrowdStrike remains a top long-term bet for investors as the company estimates its total addressable market to expand from $76 billion in 2023 to $158 billion by 2026. It ended the last quarter with $2.34 billion in annual recurring revenue.
Labor market under the radar
The Job Openings and Labor Turnover Survey (JOLTS) report for January will be released by the Bureau of Labor Statistics (BLS) on Wednesday, with job openings expected to have decreased to 10.6 million from 11 million in December.
ADP will also release its National Employment Report on the same day, with private sector payrolls predicted to have increased by 185,000 in February. The February nonfarm payrolls report from the BLS is due on Friday, with economists expecting a gain of 200,000 jobs and the unemployment rate to remain at 3.4%. In January, 517,000 jobs were added, marking the strongest job growth in six months.
Jerome Powell, the Fed Chair, is scheduled to testify before the U.S. Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday to discuss the country’s monetary policy.
The Fed is expected to raise interest rates more aggressively in the upcoming months in response to higher-than-expected inflation figures in January. Wall Street now predicts up to four additional rate hikes of 25 basis points this year, according to fed funds futures data published by CME Group. This could lead to a terminal fed funds rate between 5.5% and 5.75% by September.
President Biden will present his budget proposal to Congress on Thursday, which is expected to include tax hikes for billionaires and upper-income households but not for those earning less than $400,000 annually. The announcement comes as the government is facing an impasse on the debt ceiling, and if an agreement isn't reached, it could run out of money to pay its bills by summer.
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
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