Eye of the Storm

Look for the market to settle down some this week as we look towards earnings. Bank stocks kicked off earning season, but they are not going to be indicative of the rest of the economy. Consumer stocks and industrials will provide a real read on broader economic activity.

We will be keeping count of how many below-the-line items start cropping up in these two stock groups. As we mentioned last week, this will give us a sense on whether companies are willing to throw in the towel since they perceive the market is in such a dire state, even good earnings reports are not going to help their stock performance.

Stock prices will likely drift up a bit until the earnings landscape is clearer. If the Fed comes out with a more aggressive stance on rate raises, this upward momentum may intensify. Option expiration is this week as well, which could add more confusion to where stock prices end up. The market will probably get choppy Thursday and Friday as a result.

Best,

Pave Team