Traders on the floor of the NYSE, October 21, 2022.
Source: NYSE
Stock futures rose on Monday evening as traders braced for a flurry of economic data and minutes from the Federal Reserve’s final meeting this week to kick off the new year.
Futures linked to the Dow Jones Industrial Average rose 80 points, or 2%. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.2%.
All the major averages closed 2022 with their worst losses since 2008, each riding a three-year winning streak. The Dow ended the year down about 8.8% at 33,147.25 and 10.3% off its 52-week high. The S&P 500 lost 19.4% for the year and now stands at 3,839.50, more than 20% below its all-time high. The tech-heavy Nasdaq fell 33.1% last year. It starts in 2023 almost 34% of its record, at 10,466.88.
Inflation leading to “the worst rout for both stocks and bonds in decades” was the biggest narrative for investors heading into 2022, according to Greg Bassuk, CEO of AXS Investments. The new year begins with a cloud of concern that a “harder than desired landing” by the Fed and its anti-inflation moves could push the economy into recession.
“2022 was characterized by an inflation-blinding market downturn, in part because the year began with Wall Street and Main Street anticipating a containment of rising prices and a Federal Reserve that would keep rates at levels lower,” he said. “But a very opposite reality persisted as inflation soared.”
“In 2023, as prices remain very high, investors would be cautious to consider inflation-sensitive assets, as well as cyclical stocks and others that tend to perform well in rising price environments,” added.
Investors receive a set of data in the first trading week of the year and investors will be watching closely, looking for opportunities to adjust their portfolios to recover from the carnage of 2022. Wednesday is a big day with the Survey of Job Offers and Labor Turnover, better known as JOLTS, which will be released in the morning and the minutes of the latest Fed policy meeting will come out in the afternoon.
They also await Friday’s December jobs report, the final jobs report the Fed will have to consider before its next meeting on Feb. 1. There are also several speeches by Fed chairmen scheduled for Thursday and Friday.
First up, though, is S&P Global’s manufacturing PMI and construction spending, due out at 9:45am and 10:00am ET on Tuesday.
Walgreens Boots Alliance and Constellation Brands will also report quarterly financial results on Thursday, though it’s a quiet week for earnings reports.