Weekly Roundup: January 3-6, 2023 (Week 1/52)

 Weekly Roundup: Week 1


Market Review:

        The stock market started off the new year with a slight rally in week 1. S&P 500 was up a whopping 1.86% this week, thanks to a solid rally on Friday. This week was filled with economic data as a lot of vital numbers came out. What led to the rise on Friday was the Nonfarm payrolls and the unemployment rate. The unemployment rates came in at 3.5%, which was below the forecast of 3.7%. These are unusually low for the current state the economy is in. It is quite interesting to see a lot of major corporations cutting workforce to cut expenditures. Nonfarm payrolls came in higher at 223,000, compared to estimates of 200,000. This data reflects that inflation could be cooling a little bit. We could see The Fed lay off on being aggressive on the rate hikes. Stocks rallied on the news of this information. I still think we are in some unusual times, and it is extremely difficult to predict where the market is headed. 

Company Earnings:

Thursday:

  • Constellation Brands ($STZ): The stock took a hit after reporting earnings on Thursday. The company has seen some problems with its beer supply chain. They are having to raise prices to offset the rising operating costs. The company also received some negative sentiment due to lowering its earnings projections for the upcoming year. Revenue saw a beat on expectations and growth from last year, however, it was the EPS and overall profitability misses that caused the lag. It will be interesting to see how management assess all of the rising costs, because the alcohol is almost considered "inelastic" in my eyes. We should keep an eye on this one to see if an entry position is worth it. 
  • Walgreens Boots Alliance ($WBA): The stock initially dropped on Thursday, when the company reported earnings. On Friday, it saw a rebound and traded almost to Wednesday’s levels. The company saw a beat on both the EPS and Revenues categories. The concerning factor is the fact that EPS came in at $1.16 a share, which is lower than last years EPS of $1.68. Walgreens is struggling a tiny bit, but it looks to switch things up. They are planning on entering into the clinical trials business. The company is also dealing with a lot of settlements in legal issues, that is costing the company some hefty dollar amounts. I like this stock for the dividends, but it is not a great company if you are looking for an increase in share price. 
Market Outlook:

        This upcoming week has a lot on the line, when it comes to economic data. As an investor, I have a lot of hope that the rally will continue with some positive numbers from these readings. The CPI numbers for December come out. We will also get to see how the Federal Budget is looking. The main day to look out for is Thursday, as a lot is laying on the line with the CPI numbers. The earnings won't heat up until the end of the week. Banks will start reporting on Friday morning. We are going to learn a lot from those earnings reports. We get TSM results on Thursday, and UnitedHealth on Friday. It should be a busy week, and we will have a lot more to report and debrief next weekend. 


Thank you for reading, and have a wonderful week! 


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