The Market Week Ahead: Jan. 7 – Jan. 11

 

Jan. 7 –  Markets haven’t really calmed down in recent weeks, but the 500-point down days are mixed in with some 500-point up days, which makes it easier to take. 

It’s possible that the big drops are behind us and we’ll build a base from here, although some market watchers are still expecting a re-test of the lows. If we are on the rebound, it is unlikely to be a smooth climb, as there’s plenty of resistance that we’ll have to push through on the way back up. 

In the short term, we also have to deal with the government being shut down. That issue is set to escalate on Friday when federal employees will miss a paycheck. Some employees are working, but not getting paid, a situation that seems less and less tenable the longer it drags on. If TSA and other federal workers stop showing up to work in significant numbers, the shutdown will start to hit home for a lot more people than have been effected to date.

Trade talks with China got underway today. It seems at this point at this week’s talks are meant to set the table for higher-level talks later in the month. A surprise breakthrough seems much less likely than some sort of negative surprise. 

Over the slightly longer term, earnings season will start to heat up soon. What that will do to markets is hard to gauge from here, as much of the selling since the end of September was related to expectations for slower earnings growth. With stock prices reflecting lower expectations already, it will be interesting to see how the post-earnings trade develops.

Economic Events this Week

The economic calendar is lighter than normal due to the government shutdown.  

  • Wednesday
    • 10:30 a.m. – EIA Crude Oil Inventories
    • 2:00 p.m. – FOMC Minutes
  • Friday
    • 8:30 a.m. – CPI

Earnings Reports this Week

This may be the quietest week of the year for earnings.

Tuesday:

  • Before the bell: HELE

Wednesday:

  • Before the bell: STZ, LEN, AYI, MSM

Thursday:

  • Before the bell: DAL

Friday:

  • After the bell: INFY

Sector Analysis 

Strong Sectors past Month

These sectors are up 5% or more in the last 20 trading days:

  • Volatility
  • Junior Gold Miners
  • Silver

Weak sectors past month

These sectors are down 5% or more in the last 20 trading days:

  • Oil Services
  • Robotics & AI
  • Oil & Gas Exploration
  • Airlines
  • Steel
  • Energy
  • Real Estate
  • Health Care
  • Consumer Staples
  • Medical Devices
  • Technology
  • Coal
  • Midcaps
  • Real Estate
  • Utilities
  • Banks
  • Regional Banks
  • Industrials
  • Financials
  • Dow Jones Industrial Average
  • Semiconductors
  • Small-caps
  • Metals and mining

Strong sectors past five trading days

These sectors are up 3% or more in the last five trading days.

  • Biotech
  • Oil Services
  • Oil & Gas exploration
  • MLPs
  • Retail
  • Solar
  • Regional banks
  • Banks
  • Internet
  • Homebuilders
  • Energy
  • Steel
  • Consumer Discretionary
  • Metals and Mining
  • Coal
  • Junior Gold Miners
  • Broker-dealers
  • Nasdaq 100
  • Financials 
  • Cyber Security

Weak sectors past five trading days

These sectors are down 3% or more in the last five trading days.

  • Volatility

Bobby Raines

Bobby Raines

Bobby Raines is the Managing Editor of the Market Intelligence Center. He has degrees in Mass Communications and History from Emory & Henry College. Bobby worked at a mid-sized daily newspaper before making a switch to covering the financial industry full time in the years leading up to the financial crisis. He has been a member of the Fresh Brewed Media team since 2011 and has served as a writer and analyst. You can write to him at braines@marketintelligencecenter.com or follow him on Twitter: @BRatMICenter.

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