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Below are five things to know about going into the week of January 9th, 2023:
1. Oil & the Suez Canal: Déjà Vu All Over Again
Early Monday morning, crude oil futures rose by 3% after news broke that a massive cargo vessel ran aground in Egypt’s Suez Canal after a mechanical issue. The Suez Canal is an artificial waterway that splits Africa and Asia and connects the Mediterranean Sea to the Red Sea. Because of the central location and sheer amount of commodities and goods that pass through the canal, the Suez Canal is one of the most important routes for global trade.
Investors should keep a keen eye on oil-related stocks such as Haliburton (HAL - Free Report) , which earns a best possible Zack’s Ranking of 1. Friday, the stock broke out of a short consolidation near $38.
Image Source: Zacks Investment Research
Pictured: HAL broke out of a price consolidation Friday and is looking to challenge highs.
While oil has pulled back in price in recent weeks, oil-related stocks such as Haliburton, Exxon Mobil (XOM - Free Report) , and Schlumberger (SLB - Free Report) have decoupled from the underlying commodity. In other words, if oil is to stabilize, these stocks look promising. All three are set to report earnings over the next month – another potential catalyst.
Image Source: Zacks Investment Research
Pictured: Despite oil (red line) lagging in recent weeks, oil-related names have decoupled.
2. Fed Chair Powell to Speak in Sweden Tuesday
The Federal Reserve is arguably the most critical factor impacting your portfolio. Tuesday morning, Jerome Powell, the U.S. Federal Reserve Chairman, will speak at a symposium hosted by the Swedish Central bank. Investors will be keeping a close eye on Powell’s rhetoric toward the global economy, inflation, and interest rates. In recent months, Powell and other policymakers at the fed have been steadfast in their fight against inflation via a hawkish stance (favoring higher interest rates to quell inflation). However, at times, markets have seemed not to believe Powell will stick with it. Stocks have rallied on poor economic numbers a handful of times in recent months – hinting that some investors are discounting a fed pivot to a more dovish stance (lower rates to boost growth).
3. CPI is Due Thursday
CPI, or the Consumer Price Index, measures the average change over time in the prices consumers pay for goods (inflation). The newest batch of data is set to be released on Thursday at 8:30 am EST and is a key input in how the Fed and investors view markets.
4. Big Week for Banks
Some of the largest U.S. banks are set to report earnings Fridayincluding, Citigroup Inc (C - Free Report) , Bank of America (BAC - Free Report) , and JP Morgan (JPM - Free Report) . JPM is the strongest of the three. While Citigroup and Bank of America are stuck below their 200-day moving averages, JPM shares have exhibited relative strength and are trending above the key line. Even as interest rates have risen rapidly (usually a positive for banks) most banks have traded in lockstep with the market and have performed poorly. Can earnings inject life into these stocks?
Image Source: Zacks Investment Research
Pictured: JPM acts the strongest out of the big banks.
5. Chinese Stocks are Back in Vogue
Investors are beginning to warm up to Chinese stocks again in a big way. Bulls are liking the fact that strict government lockdowns are being lifted, and the Chinese government is stepping in to support the country’s beaten-down real estate sector. Last week ADRs such as Alibaba (BABA - Free Report) ,Pinduoduo (PDD - Free Report) , and JD.com Inc (JD - Free Report) soared. PDD has been a market leader and holds the best possible Zack’s Ranking of 1. The stock has come a long way in a short time, so it should not be chased but instead entered on constructive pullbacks. Before the open Monday, most Chinese stocks continued to add to gains from last week.
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5 Things to Know for the Week of 1/9
Below are five things to know about going into the week of January 9th, 2023:
1. Oil & the Suez Canal: Déjà Vu All Over Again
Early Monday morning, crude oil futures rose by 3% after news broke that a massive cargo vessel ran aground in Egypt’s Suez Canal after a mechanical issue. The Suez Canal is an artificial waterway that splits Africa and Asia and connects the Mediterranean Sea to the Red Sea. Because of the central location and sheer amount of commodities and goods that pass through the canal, the Suez Canal is one of the most important routes for global trade.
Investors should keep a keen eye on oil-related stocks such as Haliburton (HAL - Free Report) , which earns a best possible Zack’s Ranking of 1. Friday, the stock broke out of a short consolidation near $38.
Image Source: Zacks Investment Research
Pictured: HAL broke out of a price consolidation Friday and is looking to challenge highs.
While oil has pulled back in price in recent weeks, oil-related stocks such as Haliburton, Exxon Mobil (XOM - Free Report) , and Schlumberger (SLB - Free Report) have decoupled from the underlying commodity. In other words, if oil is to stabilize, these stocks look promising. All three are set to report earnings over the next month – another potential catalyst.
Image Source: Zacks Investment Research
Pictured: Despite oil (red line) lagging in recent weeks, oil-related names have decoupled.
2. Fed Chair Powell to Speak in Sweden Tuesday
The Federal Reserve is arguably the most critical factor impacting your portfolio. Tuesday morning, Jerome Powell, the U.S. Federal Reserve Chairman, will speak at a symposium hosted by the Swedish Central bank. Investors will be keeping a close eye on Powell’s rhetoric toward the global economy, inflation, and interest rates. In recent months, Powell and other policymakers at the fed have been steadfast in their fight against inflation via a hawkish stance (favoring higher interest rates to quell inflation). However, at times, markets have seemed not to believe Powell will stick with it. Stocks have rallied on poor economic numbers a handful of times in recent months – hinting that some investors are discounting a fed pivot to a more dovish stance (lower rates to boost growth).
3. CPI is Due Thursday
CPI, or the Consumer Price Index, measures the average change over time in the prices consumers pay for goods (inflation). The newest batch of data is set to be released on Thursday at 8:30 am EST and is a key input in how the Fed and investors view markets.
4. Big Week for Banks
Some of the largest U.S. banks are set to report earnings Friday including, Citigroup Inc (C - Free Report) , Bank of America (BAC - Free Report) , and JP Morgan (JPM - Free Report) . JPM is the strongest of the three. While Citigroup and Bank of America are stuck below their 200-day moving averages, JPM shares have exhibited relative strength and are trending above the key line. Even as interest rates have risen rapidly (usually a positive for banks) most banks have traded in lockstep with the market and have performed poorly. Can earnings inject life into these stocks?
Image Source: Zacks Investment Research
Pictured: JPM acts the strongest out of the big banks.
5. Chinese Stocks are Back in Vogue
Investors are beginning to warm up to Chinese stocks again in a big way. Bulls are liking the fact that strict government lockdowns are being lifted, and the Chinese government is stepping in to support the country’s beaten-down real estate sector. Last week ADRs such as Alibaba (BABA - Free Report) , Pinduoduo (PDD - Free Report) , and JD.com Inc (JD - Free Report) soared. PDD has been a market leader and holds the best possible Zack’s Ranking of 1. The stock has come a long way in a short time, so it should not be chased but instead entered on constructive pullbacks. Before the open Monday, most Chinese stocks continued to add to gains from last week.