It has been a wild week in the stock market, with the Dow Jones Industrial Average making a fresh intraday high of more than 40,000 and strong investor confidence driving a bullish narrative. Most indices are trading near all-time highs, utilities are flying (as quasi-AI plays) and commodity prices are also surging.
While the narrative has certainly been more bullish this week, thanks to weaker-than-expected inflation data, there’s also plenty to watch in the week ahead. Between macro factors and various sector-specific catalysts and headwinds, investors have plenty to keep them on their toes.
Let’s dive into five of the major stories investors may want to stay attuned to next week.
The Week Ahead in Stocks
We’ve seemingly moved away from a Federal Reserve-driven market, but it’s clear that the top priority for many investors this coming week will be incoming Fed speak and housing market data. On Wednesday, existing home sales will be published, along with the Federal Open Market Committee (FOMC) meeting minutes, which will be parsed by investors for specific language. Thursday will also bring PMI and jobless claims data, with a slew of Fed speakers set to talk to the media throughout the week. Any sort of shift in narrative should shape how the market responds this upcoming week.
The second and third key factors I think are important to watch are index levels (can the Dow remain above the key psychological threshold of 40,000?) and how earnings reports will affect the overall indices. A full slate of earnings is ahead, with many consumer-facing companies putting forward their numbers. Investors will certainly infer what these numbers mean for the respective companies, but also the overall market.
Finally, the last two factors to hone in on next week are commodity prices and whether the relatively low volatility we’ve seen via the Volatility Index (VIX) continues. We’ve seen a surge in precious metals, cocoa and other key commodity inputs, although that hasn’t translated into stock market volatility. We’ll have to see whether this dynamic changes in the week to come.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
