Wall Street on the rise
The S&P 500 was 1.1% higher ahead of Tuesday's report on inflation at the consumer level across the country. It's coming off its worst week in nearly two months.
The Dow Jones Industrial Average was up 323 points, or 1%, at 34,193, as of
High inflation and the
Economists expect Tuesday's report to show inflation slowed to 6.2% in January. That would be down from 6.5% a month before and from a peak of more than 9% in the summer. Perhaps more important than the overall number is what the data show about prices for services outside of housing, such as haircuts or airfares. Inflation has remained stubbornly high there, when it's started to come down in other areas.
A worse-than-expected reading would raise worries that the
Yields were relatively steady Monday ahead of the inflation report. The yield on the 10-year
All the worries about inflation and rates are happening against the backdrop of a decidedly lackluster earnings reporting season. Companies in the S&P 500 are on track to report a nearly 5% drop in earnings for the final three months of 2022, compared with a year earlier, according to FactSet.
By the count of strategists at Credit Suisse, this is shaping up to be the worst earnings reporting season outside of a recession in 24 years.
Pessimism is also building about earnings for the first three months of 2023, with forecasts coming down.
A continued decline in corporate earnings is one of the reasons strategists at
"Price action is not reflective of the deteriorating fundamentals or the fact that the Fed is hiking during an earnings recession — drivers that should ultimately determine the lows for this bear market later this spring," the strategists led by
The bulk of earnings reports have already come in for this season, with big utility companies and retailers among the companies toward the tail end. This upcoming week will include reports from
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