3 things to watch in the stock market next week

Posted: 11 February 2022 4:07 pm
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More choppy trading could lie ahead as economic reports keep the market guessing what the Fed will do on interest rates. Also worth watching: earnings reports and whether Bitcoin can break out.

Stocks suffered through an up and down week as traders tried to guess what the Federal Reserve will do with interest rates at its meeting next month. That and some mixed earnings results drove a week that ended with the Nasdaq down 3%.
Next week could be similar, as inflation and interest rate questions will last at least until the Fed meets March 15–16.
Here are three things worth watching in the markets in the week ahead:

1. Continuation of earnings season

Fourth-quarter earnings reports are beginning to wind down, but next week’s earnings schedule includes a handful of reopening stocks you should keep an eye on. Surging COVID-19 cases caused by the omicron variant has renewed uncertainty for investors, and the numbers may show how serious the problem remains.
On Tuesday, Airbnb (ABNB), Marriott International (MAR), Wyndham Hotels & Resorts (WH) and Wynn Resorts (WYNN) report. All are expected to deliver a year-over-year increase in earnings on higher revenues.
Investors will be looking to find out what effect omicron had on results and guest numbers in the last few quarters of 2021 and how they’re addressing this latest surge.
Keep an eye on these stocks too.

  • Shopify (SHOP). Scheduled for Wednesday. Shoppers are increasingly shifting to online commerce and Shopify continues to take a larger share of the space.
  • Walmart (WMT). Scheduled for Thursday. Watch for updates on labor shortages and supply chain-related issues.
  • DraftKings (DKNG). Scheduled for Friday. An increasing number of states have begun the process of legalizing sports betting ever since the US Supreme Court delivered a landmark decision to strike down the federal ban on sports gambling. Watch for updates on how DraftKings is scaling up in new markets.

2. Fed rate speculation

The next Fed meeting isn’t slated until March 15, but there are some smaller economic reports out next week and two Fed bigwigs are scheduled to speak. Fed Governor Michelle Bowman speaks Wednesday and Richmond Federal Reserve Bank President Tom Barkin speaks on Friday.
Barkin on Thursday said he would be “conceptually” open to raising interest rates by a bigger-than-usual half-of-a-percentage point increment, but doesn’t think there’s a need for it at the moment, according to Reuters.
Investors have been wondering just how aggressive the Fed will move to curb rising inflation, and the prospect of a more hawkish Fed has been the leading market mover this year.

3. Will Bitcoin break the $40K-to-$45K channel

Bitcoin has been recovering since falling below the $33K mark in January. It broke back above $40K last week after Amazon’s (AMZN) strong earnings pulled the Nasdaq Composite Index into positive territory.
Bitcoin currently sits at $43.3K and has been trading in the $40K to $45K range all week. Enthusiasts are looking for a break above $45K, a key resistance level, and it’s tried this week. The $40K mark remains a key level of support. A break either way could signal a reversal or a continuation of the downtrend.
Crypto has long been thought of as an alternative to stocks, but of late have been trading similar to tech stocks.
At the time of publication, Matt Miczulski owned BTC and shares of AMZN and DKNG.

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