Week of October 31, 2022

Investors cheered last Friday with a monster rally fueled in part by Apple reporting strong third-quarter earnings.  The Dow surged 828.50 points, or 2.59%, the S&P 500 jumped 93.76 points, or 2.46%, and the NASDAQ gained 309.75 points, or 2.87%.  The Dow is up 14.4% in October, which would be its best month since 1976.  The S&P 500 and NASDAQ are also up for the month, putting Watt Street on track to snap a two-month losing streak.

The market is preparing for the latest Federal Reserve meeting, which begins Tuesday, November 1, with the announcement of the Fed’s decision about raising interest rates on Wednesday, November 2.  The Fed is expected to hike interest rates by three quarters of a percent, but many on Wall Street are looking for a signal from the statement release or Chairman Jerome Powell’s press conference that the Fed could pause its hikes in the near future.

“The tone from Fed Chair Powell will be important” after this week’s meeting, said Yeap Jun Rong if IG in a report.  Investors are looking for “increased concerns on economic conditions” instead of the “current head-on resolve to tame inflation.”

Third-quarter earnings season continues this week, with 161 companies in the S&P 500 to report, including one Dow member, Amgen.  More than half of the S&P 500 (264 companies) have reported 3Q earnings, and so far, the results are ahead of expectations.