Wall Street mixed on Tuesday
Only the Dow Jones reported gains yesterday.
The three big indexes have closed the day as follows:
the S&P 500 closed at -0.07%, the Nasdaq ended the trading session at -0.27% and the Dow Jones closed at +0.31%.
Investors’ sentiment remains bullish as indicated in the graph below:
Sentiment indicator - Fear & Greed Index
The market sentiment is at 63 in the “Greed” mode. One month ago the market sentiment was in "Fear" mode.
Earning season
The most important event of this week is the quarterly earnings reports of the big companies.
This round of earnings is particularly important for the market because if the reports are going to show less than expected earnings then the stock market could fall.
Some of the big tech giants have already announced a layoff so economists are not forecasting a high-earning season.
For the start of 2023, traders and investors are buying stocks, but they are waiting for a confirmation that the bullish trend can last.
For this reason, the next action of the Federal Reserve will be crucial.
The majority of investors are expecting a reduction in the interest rates hike, as shown in the chart below, but any different Fed decision can lead to a big selloff.
FedWatch Tool – FED rates probabilities
98.2% of investors are expecting the FED to increase the interest rates by 0.25% at the next meeting.
The remaining 1.8% are expecting a 0.50% rate increase.
The next FED meeting is on 1 February 2023.
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