Dow futures rise more than 100 points on first trading day of 2023

Traders on the floor of the NYSE, October 21, 2022.

Source: NYSE

Stock futures rose on Tuesday as Wall Street tried to start the new year on a strong note. Traders also braced themselves for a flurry of economic data to come this week.

Futures linked to the Dow Jones industrial average rose 149 points, or 0.44%. S&P 500 futures rose 0.51%, while Nasdaq 100 futures rose 0.73%.

The major averages ended 2022 with their worst annual losses since 2008, snapping a three-year winning streak. The Dow ended the year down 8.8%, 10.3% off its 52-week high. The S&P 500 has lost 19.4% for the year and is off more than 20% from its record high. The tech-heavy Nasdaq fell 33.1% last year.

History shows The US stock market is rebounding after several years. In fact, the S&P 500 has, on average, gained 15% the following year after losing more than 1%.

However, any recovery depends on the resolution of some key factors that have weighed on the stock in 2022.

According to Greg Bassuk, CEO of AXS Investments, inflation is “the worst failure in decades for both stocks and bonds” and is the biggest investor narrative for 2022. The New Year begins with a cloud of worry that the central bank’s “harder-than-desired landing” and its inflation-fighting moves could push the economy into recession.

“2022 was characterized by an inflation-blind market trajectory as both Wall Street and Main Street began the year with the Federal Reserve holding rates low and controlling rising prices,” he said. “But as inflation rose, the stark opposite became reality.”

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“Going into 2023, as prices remain elevated, investors will be careful to consider inflation-sensitive assets and cyclicals and other stocks that perform better in a rising price environment,” he added.

Investors get a set of data in the first trading week of the year. First, the S&P Global Manufacturing PMI and Construction Spending will be released on Tuesday at 9:45 a.m. and 10 a.m. ET.

Wednesday’s jobs and labor turnover survey, known as JOLTS, will be released in the morning and minutes of the central bank’s latest policy meeting will come out in the afternoon.

They are looking forward to Friday’s December jobs report, the final employment report the central bank must consider before its next meeting on February 1. There are also several speeches by central bankers on Thursday and Friday.

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