Stocks in the U.S. were mixed this week following the latest batch of corporate earnings reports. As of Wednesday morning, the S&P 500 index was basically flat for the week as markets retraced Monday’s sharp gains. Technology stocks traded lower as shares of Microsoft (MSFT) fell following weaker than expected forward guidance. Shares of Boeing fell about 2% following lower than expected earnings despite a recovery in demand. In bonds, interest rates trended lower ahead of next week’s Federal Reserve meeting, where the central bank is widely expected to hike rates by another 0.25% (25 basis points).
As the week continues, several key economic data reports will be released, including gross domestic product (GDP) figures on Thursday and the personal consumption expenditure (PCE) price index on Friday. Consensus estimates are looking for fourth-quarter GDP to grow at an annualized clip of 2.7%, reflecting strength in consumption growth. On Friday, the PCE price index will provide another look at the pace of inflation. The PCE reflects how much consumers pay for products and is one of the Federal Reserve’s favored inflation gauges. Forecasts are calling for a 0.27% month-over-month increase for December, corresponding to a 4.40% increase from a year earlier.
Overseas, Germany’s business climate index showed an uptick in sentiment for January as the index rose to 90.2 from December’s 88.6 print. Some market participants now are projecting the economy may not enter a technical recession as there is optimism economic growth may come in flat. In Asia, markets are closed the rest of the week for the Lunar New Year holidays in China and Hong Kong
Source: GSAM, CNBC, JPMorgan
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