Of the 29% of S&P 500 companies that have reported results to date, just 69% have seen earnings per share come in above estimates, below the 5-year average of 77% and 10-year average of 73%, per data from FactSet.įor Amazon, key headwinds investors will be looking for color on include softening consumer discretionary spending and decelerating growth for its cloud business, AWS, according to Arun Sundaram, senior equity analyst at CFRA Research. Overall, fourth quarter earnings season continues to be a modest disappointment, though the market's performance this year shows investors are largely not surprised. "We continue to think that we should not fight the Fed because they will demonstrate a slow reaction function on inflationary risk management." "We need activity weakness to translate to job losses to address Powell’s preferred services ex-shelter inflation metric, where wages are the primary driver," Alexandra Wilson-Elizondo, head of Multi-Asset Retail Investing at Goldman Sachs Asset Management, said in a recent note to clients. Strategists who have doubted market expectations for the Fed to pause rate hikes point to continued labor market tightness, as wage pressures still pose a risk to inflation, even as consumer price increases continue to slow from multi-decade highs reached in the summer of 2022. The employment picture has moderated in recent months, but demand for workers remains high, with the labor market breezing through the Fed's monetary tightening campaign.ĭecember's data showed the labor market added a robust 223,000 jobs during the month, and a monthly average of 375,00 during all of last year - even as 425 basis points worth of rate hikes permeated through the economy. TT News Agency/Claudio Bresciani/via REUTERSĮlsewhere on the economic data front, the January jobs report comes out on Friday. Federal Reserve Chair Jerome Powell attends the Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023.
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