With all three major averages moving higher in today’s session, investors are seeing what appears to be a pause to the bearish sentiment that has permeated the price action for equities in recent weeks. With stocks up today, some investors may be content to rest on their laurels. However, this week is poised to be big, with plenty of catalysts on the calendar.
On Tuesday and Wednesday, investors will hear more “Fed speak” from the Federal Reserve Chairman. Jerome Powell will testify to the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. Investors will be looking to gauge how the Fed interprets the data that rolls in.
Some of the data that will be discussed will be the ADP monthly payroll number, the January job openings report, and the Fed’s Beige Book, all of which will be released on Wednesday. These data will precede Friday’s all-important jobs report, which is expected to show 200,000 jobs created in February.
Investors’ heads may be spinning with so many data points to assess. So let’s dive into what to make of today’s price action.
Why Are Stocks Up Today?
With so many potential catalysts this week, there are really two ways of looking at the current situation. On the one hand, investors may view each of these upcoming reports as reasons why stocks can sell-off. Indeed, that’s been the case over the past year or so. There’s pessimism everywhere, and investors have recently found plenty of reasons to sell, particularly with all the robust yet concerning data available.
On the other hand, the data may show the slowing that many expect. If the economy is downshifting, and the Fed can choreograph a more accommodative future, perhaps stocks can recover. This appears to be the view investors are taking today.
Additionally, it’s also possible that any upcoming lousy news may already be priced into the valuations of stocks. Given the rough ride equities have been on lately, that’s not a stretch.
In any case, this afternoon’s unwinding of gains could suggest a mixed outlook among bulls and bears. For now, the market appears to remain uncertain. And until we have some clarity on these numbers, I expect more uncertainty could translate into higher volatility this week.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
