How Economic Data Is Impacting the Stock Market

Action Alerts PLUS co-portfolio manager Chris Versace and Real Money contributor Stephen ‘Sarge’ Guilfoyle take a look at the markets and break down what they’re watching on January 30 at 12 pm Eastern on Twitter Spaces.

Between earnings season and the ongoing discussion of recession probabilities, there’s a lot of factors contributing to the current market environment. 

And, let’s face it, that can cause a fair amount of anxiety. 

As Real Money’s Stephen Guilfoyle has pointed out, the macroeconomic data that the market has received  in the past month hasn’t helped to ease that anxiety. 

But perhaps the weekly initial jobless claims paired with the fourth quarter gross domestic product print will be enough to help ease at least some anxiety.

Guilfoyle took a look at the print in a column for Real Money:

“At the surface, this was just what the doctor, or rather the FOMC ordered. A quarterly GDP print, or really two consecutive GDP prints, that put 2022 on the whole well into positive growth territory and appear to set the stage for this great white whale that the Fed has been hunting — the “soft landing” of the US economy. The Federal Reserve has been aggressive all year on increasing short-term interest rates while methodically drawing down on excess liquidity through the monthly reduction of the monetary base. Though the headline estimate for Q4 GDP printed at 2.9%, personal consumption expenditures, which are a significant driver, if not the significant driver, for the US economy, printed at growth of 2.1%. Economists had been looking/hoping for something in the mid 2%s.

Chris Versace, portfolio manager of Action Alerts PLUS, has been digging into earnings reports to understand how companies are faring in a challenging environment.

Versace explained his thoughts in his morning note to AAP subscribers:

As we digest this [Friday’s] crop of earnings reports from American Express (AXP), Chevron (CVX), and others, 8:30 AM ET brings the last piece of inflation data before the Fed’s monetary policy meeting next week. That will come to us in the form of the December Personal Consumption Expenditure (PCE) price index, a favorite inflation gauge for the Fed, that is bundled along with the December data for Personal Income and Spending. In particular, we will be examining the December core PCE data, which is expected to tick lower to +4.4% YoY from November’s 4.7% reading. Should that data point to greater-than-expected progress on inflation, the market is likely to interpret that as favorable for what the Fed will share next week.

On Monday, January 30 TheStreet will be going live with Chris Versace and Stephen Guilfoyle, who contribute and work on Action Alerts PLUS and RealMoney. 

The Spaces will begin at noon Eastern, and can be found here. 

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