Stock bulls remain in control after pushing all three major indexes to new all-time record highs.
For those keeping track, this is the 12th record closing high for the S&P 500 this year with the index now up +6.7% in 2024. The Nasdaq’s new record closing high is its first since 2021 and puts the index up nearly +7% the first two months of the new year, while the Dow is up +3.7%.
Much of the enthusiasm stems from Nvidia’s blowout earnings after the market close on Wednesday, which tech bulls believe reinforced the sky-high profit expectations that investors have been building around artificial intelligence. The main debate now is whether the AI-fueled rally has pushed tech stocks into bubble territory?
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For what it’s worth, Nvidia’s stock rally last week added close to $280 billion to its market cap, by far the largest single-session gain in market history. This year alone, Nvidia’s market value has grown over +$700 billion and is now within striking distance of the $2 trillion mark.
Important week ahead
Looking to next week, the earnings calendar really starts to thin out and most of the big names are behind us. That means investors are likely going to be paying even closer attention to economic data, especially as Wall Street continues trying to guess how much the Federal Reserve will cut interest rates in 2024.
On that note, Wall Street is extremely anxious to see the February Employment Report due out next Friday. If you recall, the January jobs report came in very hot with over +350,000 jobs added. More concerning was the uptick in hourly wage gains to an annual rate of +4.5% versus +4.3% in December. Many bulls have dismissed the strong January jobs data as being skewed by seasonal adjustments so they will be looking for a much softer February report to confirm that belief. The risk is that February data also tops expectations, reinforcing concerns that the US economy is still too hot to bring inflation down to the Federal Reserve’s +2% target rate.
Ahead of the jobs report, investors will be dissecting the January Job Openings and Labor Turnover Survey (JOLTS) on Tuesday and the ADP Private Payroll Report on Wednesday for more clues on how the labor market is trending.
Other key data next week includes Factory Orders on Monday; Wholesale Inventories on Tuesday; and Q4 Productivity & Labor Costs and Consumer Credit on Wednesday. Earnings will include the first half of a string of key retailers that report over the next two weeks, including Lowe’s on Tuesday, TJX Cos. on Wednesday, and Best Buy and Bath & Body Works on Thursday.
Other highlights include Zoom Video on Monday; AutoZone, eBay, JM Smucker, and Monster Beverage on Tuesday; HP, Salesforce, and Snowflake on Wednesday; and AnheuserBusch InBev, Autodesk, Dell, and Hormel Foods on Thursday.
Let’s also not forget, the US government is nearing the possibility of partial shutdown late next week, as four different kinds of appropriation bills have their deadlines end next Friday.
Then there’s a second set of deadlines the following Friday, March 8. We also still have a war brewing between Russia and Ukraine and ongoing fighting in the Middle East.
Important Week Ahead: Economic Data, Earnings
Wishing you a great week!
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