What do you know this week?

Stocks closed out another week hovering near record highs as it is set to be one of the busiest weeks of the quarter for investors.

Earnings from five of the “Magnificent Seven” tech stocks — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta (META) — will highlight a week packed with quarterly reports. In all, 106 S&P 500 companies, including six Dow Jones components, are scheduled to report next week, according to FactSet.

The Federal Reserve is scheduled to announce its latest policy decision on Wednesday afternoon. Investors expect the central bank to leave interest rates unchanged in a range ranging from 5.25% to 5.50%. Investors will be closely watching any comment during Federal Reserve Chair Jerome Powell's conference on Wednesday about when the Fed might start cutting interest rates.

On Friday, the January jobs report is scheduled for release with economists expecting a modest decline in additional payrolls while unemployment is expected to remain steady at 3.7%.

Elsewhere in the schedule, major updates on activity in the manufacturing and services sectors of the economy, as well as the latest data on job opportunities, highlight the economic side of things.

Outside of Big Tech, results from AMD (AMD), Starbucks (SBUX), Pfizer (PFE), CVX), Exxon Mobil (XOM), and Boeing (BA) top the reporting calendar.

Stocks will enter the final week of the month near all-time highs. After a rocky start to the year, the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are both up more than 2% so far in January. Meanwhile, the Dow Jones Industrial Average (^DJI) rose more than 1%.

The market narrative has changed dramatically since Jerome Powell last took the stage in December. Investors aggressively priced the cut in March and then trimmed those bets as surprising economic growth continued to trend upward.

But with inflation at its lowest levels in nearly three years, many Wall Street economists still believe the Fed will start cutting interest rates in the near future.

The story continues

“It is time for Fed officials to take the gains and start tapering down policy soon,” Andrew Hunter, deputy chief U.S. economist at Capital Economics, wrote in a note to clients on Friday.

Investors still have mixed bets on when this reduction will come. As of Friday afternoon, markets were anticipating a 47% chance that the Fed would cut interest rates in March. According to CME FedWatch. Looking ahead to May, investors believe there is an 88% chance interest rates will fall by the end of that meeting.

Bank of America economist Michael Gapen expects the Fed to change its statement after the meeting to more neutral language about policy restraint, acting as a “de facto policy easing bias.” But he doesn't think Powell and the central bank will completely turn their hands just yet.

“Labor markets have cooled, and inflation has fallen more quickly than expected in the absence of a significant rise in unemployment, but we do not believe the Fed is ready to send a strong signal about its intentions yet,” Gaben wrote in a note to the Post. customers on Friday.

Jabin believes the Fed will buy time to see more data. Some of this data will come in the days following the Fed meeting.

The January jobs report is scheduled to be released at 8:30 a.m. ET on Friday. While layoffs have dominated headlines in recent weeks, economists expect any signs of a broad slowdown in the labor market to remain absent from the data.

The report is expected to show that 175,000 non-farm jobs were added to the US economy last month along with unemployment. It rose slightly to 3.8%, according to Bloomberg data. In December, the US economy added 2,160,000 jobs while the unemployment rate remained unchanged at 3.7%.

“Overall, themes of improving supply, cooling demand, and overall labor market normalization are likely to persist in January,” Wells Fargo's team of economists led by Jay Bryson wrote in a weekly note to clients. “Although salary growth has held up significantly recently, there are many signs of further moderation in the coming months. On a net level, fewer industries are adding headcount each month and job openings and hiring plans continue to decline.” “

As if the economic calendar alone wouldn't be enough to keep investors on their toes, the biggest week for corporate earnings this quarter will also set the stage for how companies will hold up amid the rising interest rate environment.

Analysis from FactSet on Friday shows how much upcoming earnings could push the market narrative. Excluding Tesla, the other “Magnificent Seven” technology stocks are expected to be the top six earnings drivers for the S&P 500, contributing to year-over-year earnings growth of 53.7%. Excluding those six companies, the remaining 494 companies will announce a decrease in their profits by 10.5%.

Five of those major companies – Alphabet, Microsoft, Meta, Amazon and Apple – are scheduled to report next week.

Julien Emmanuel, managing director of Evercore ISI, described the share price reaction to these reports as “important for the overall market direction.”

Weekly calendar

Monday

Economic data: Dallas Fed Manufacturing Activity, January (previously -9.3)

Earnings: Cleveland Cliffs (CLF), Philips (PHG), SOFI Technologies (SOFI), Whirlpool (WHR)

Tuesday:

Economic data: S&P CoreLogic NSA for 20 cities YoY (previously 4.87%); Conference Board Consumer Confidence, January (112.5 expected, 110.7 previous) JOLTS Job Openings, December (previously 8.79 million); Federal services activity in Dallas, January (previously -8.7)

Earnings: Advanced Micro Devices (AMD), Alphabet (GOOGL), Electronic Arts (EA), General Motors (GM), JetBlue (JBLU), Juniper Networks (JNP), Match Group (MTCH), Marathon Petroleum Corporation (MPC), Microsoft (MSFT), Pfizer (PFE), Starbucks (SBUX), UPS (UPS)

Wednesday

Economic data: MBA Mortgage Applications, Week Ending January 26 (3.7%); ADP Private Sector Payrolls, January (+150,000 expected, +164,000 previously); Employment Cost Index, Q4 (1.0% expected, 1.1% previous) Fed Monetary Policy Decision (no interest rate change expected)

Earnings: Aflac (AFL), Boeing (BA), Hess (HES), MasterCard (MA), MetLife (MET), Novo Nordisk (NVO), Philips 66 (PSX), Qualcomm (QCOM)

Thursday

Economic data: Challenger job cuts, year-over-year, in January (previously -20.2%); Unit Labor Costs, Q4 (+2.6% expected, -1.2% prior); Nonfarm Productivity, Q4 (+1.6% expected, +5.2% previously); Initial jobless claims, week ending January 27 (previously 214,000); S&P Global US Manufacturing PMI, final January (previously 50.3); Construction Spending, MoM, December (+0.5% expected, 0.4% previously); ISM Manufacturing Index, January (expected 47.5, previous 47.2); Paid ISM Rates, January (previously 45.2)

Earnings: Apple (AAPL), Amazon (AMZN), Deckers Brand (DECK), Honeywell (HON), Meta (META), Merck (MRK), Royal Caribbean Group (RCL), Peloton (PTON), SiriusXM (SIRI), Skechers ( SKX), Tractor Supply (TSCO), Clorox Company (CLX), United States Steel (X)

Friday

Economic calendar: Nonfarm Payrolls Report, January (+175,000 expected, +216,000 previously); Unemployment Rate, January (3.8% expected, 3.7% previously); Average hourly earnings, month-on-month, January (+0.3% expected, +0.4% previously); Average hourly earnings, year-over-year, January (+4.1% expected, +4.1% previously); Average weekly hours worked, January (34.4 expected, 34.3 previous); Labor force participation rate, January (previously 62.5%); University of Michigan sentiment, last January (78.8 expected, 78.8 prior); Factory Orders, December (+0.5% expected, 2.6% previous); Durable Goods Orders, December Final (previously 0.0%)

Earnings: Chevron (CVX), Exxon Mobil (XOM), Charter Communications (CHTR)

Josh Schaeffer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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