Traders on the floor of the NYSE, October 21, 2022.
Stock futures rose Monday evening as traders braced for a deluge of economic data and the minutes of 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 major averages ended 2022 with their worst losses since 2008, each on a three-year win streak. The Dow ended the year about 8.8% lower at 33,147.25 and 10.3% lower than its 52-week high. The S&P 500 lost 19.4% this 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 2023 almost 34% off its record, at 10,466.88.
According to Greg Bassuk, CEO of AXS Investments, inflation leading to “the worst defeat for both stocks and bonds in decades” was the biggest investor story for 2022. The new year begins with a cloud of worry that a “harder-than-desired landing” of the Fed and its actions to fight inflation could push the economy into recession.
“2022 was marked by an inflation-blinding market crisis, in part because the year kicked off with Wall Street and Main Street both anticipating containment of rising prices and a Federal Reserve keeping rates at a lower level,” he said. “But a starkly opposite reality held firm as inflation skyrocketed.”
“Heading into 2023, as prices remain substantially high, investors would be wise to consider inflation-sensitive assets, as well as cyclicals and other stocks that thrive in rising price environments,” he added.
Investors will be getting a bundle 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 Job Openings and Labor Turnover Survey , known as JOLTS, which will be released tomorrow morning and the minutes of the Fed’s last policy meeting that will be released in the afternoon.
They also look forward to Friday’s December jobs report, the final employment report that the Fed will have to consider before its next meeting on February 1. Several speeches by Fed presidents are also scheduled for Thursday and Friday.
First up, however, is S&P Global PMI for manufacturing and construction spending, to be released at 9:45 a.m. and 10 a.m. ET on Tuesday.
Walgreens Boots Alliance and Constellation Brands will also report their quarterly financial results on Thursday, though it’s otherwise been a quiet week for earnings reports.