What to expect in the week ahead (GS, BAC, NFLX, PG)

Moomoo Breakfast US wrote a column · Jan 17, 2022 08:46

What to expect in the week ahead (GS, BAC, NFLX, PG)

Weekly market recap
The stock market's winter selloff deepened last week, pushing all three major indexes further into the red for 2022.

The S&P 500 and Dow Jones Industrial Average both fell a second straight week, while the Nasdaq Composite has been down the last three. Investors continued to sell bonds, pushing the yield on the benchmark 10-year U.S. Treasury note up for a fourth straight week, notching its biggest rise over that stretch since mid-March.

Lackluster earnings from some big U.S. banks, along with weak retail sales and manufacturing data, sent most of the market lower again on Friday until a late-session buying rush pushed the S&P 500 and Nasdaq back into positive territory.

Here's a look at the return of S&P 500 sectors

The week ahead in focus
The market's focus in the coming week turns toward fourth-quarter earnings, which are expected to reveal stronger profit growth for economically sensitive stocks compared to technology players.

The earnings period could test a theory that value and cyclicals are set to outperform tech stocks. It will also be a time when investors get a firsthand look at how companies are dealing with inflation, which rose 7% on an annualized basis during the final month of 2021, as measured by the consumer price index.

Several major banks reported Friday, and the earnings season gets busier in the week ahead with a range of sectors. Financials, like $Goldman Sachs (GS.US)$, $The Travelers Companies (TRV.US)$ and $Bank of America (BAC.US)$, report, as does $Netflix (NFLX.US)$ and consumer brand giant $Procter & Gamble (PG.US)$. There are also results coming from transportation companies, including $JB Hunt Transport Services (JBHT.US)$, $United Airlines (UAL.US)$ and $Union Pacific (UNP.US)$.

The Treasury market may be quieter in the four-day week because Federal Reserve officials are in a quiet period ahead of their two-day meeting beginning Jan. 25.