Stock Market - The Week Ahead

US Data

Following a hectic week that featured the Fed's first meeting of the year and the release of the January employment data, the U.S. economic calendar is noticeably quieter.

The primary indicator to keep an eye on is Monday's ISM services PMI for January, as analysts anticipate increased activity in the industry at the beginning of the year. On Thursday, the Labour Department will release the weekly data on initial jobless claims.

Earnings continue

The earnings season is still in full swing, and this week's reports will help gauge whether the stock market's record-breaking run can continue.

Thanks in part to the surging shares of Facebook parent company Meta and Amazon, which surged 20% and 8%, respectively, after their corporate reports, the S&P 500 reached a new high on Friday following the jobs data.

The three main U.S. market indexes had weekly advances for the fourth time in a row.

A sizable group of S&P 500 firms, including Eli Lilly, Walt Disney, ConocoPhillips, and PepsiCo, are scheduled to report this week, despite the fact that the majority of the major tech companies have already done so.

Crude oil

Oil prices dropped by nearly 2% on Friday, and both benchmarks lost around 7% for the whole week as investors recalculated their expectations for the Fed to lower rates in the near future, which might reduce demand for crude oil.

However, worries over the escalating tensions in the Middle East are certain to continue after the US launched retaliation attacks late Friday against terrorists in Iraq and Syria who Iran backed in response to a drone assault in Jordan that claimed the lives of three US soldiers the previous weekend.

In response to repeated attacks on Red Sea shipping channels, which are vital to the world's energy supplies, the United States and Great Britain also initiated a new wave of raids against Houthi targets in Yemen late on Saturday.

China

On Thursday, China will release inflation data that is anticipated to demonstrate the strengthening of deflationary forces. Economists predict that January's consumer price index will be negative 0.5%, up from negative 0.3% in December.

The second largest economy in the world has been hampered by sluggish demand that has persisted, a downturn in the real estate market, and an unsteady investor mood.

The year has already started brutally for the Chinese markets. With a 6% loss at the end of January, the blue-chip index had seen a record six months of losses.

(Sources: investing.com, reuters.com)