A flurry of earnings, another Fed rate hike, signs of a new bull market — and what's ahead next week

Published Sat, Feb 4 20238:00 AM ESTUpdated Sat, Feb 4 202310:00 AM EST

Earnings season continues next week, with Club holdings Linde (LIN), Emerson Electric (EMR) and Walt Disney (DIS) all set to report. We'll be looking beyond the headline numbers to forward guidance, and any relevant commentary from management on how those companies intend to protect profit margins amid continued economic uncertainty. The market response to a flurry of fourth-quarter earnings releases this past week has shown that, like us, most investors are more focused on the outlook provided by companies and their cost-cutting efforts, rather than the quarterly figures. For example, despite Apple (APPL) delivering an earnings miss Thursday, along with its largest sales decline since 2019, its stock managed to climb roughly 2.5% Friday and close out the week up nearly 6%. That rise came after management indicated headwinds were subsiding and guided for gross margins in the upcoming quarter to expand more than analysts had forecasted. Similarly, shares of Meta Platforms (META) have surged over 20% since CEO Mark Zuckerberg reassured investors Wednesday evening that 2023 would be the technology giant's "year of efficiency." These market moves suggest we could be in the early days of a new bull market, particularly if Federal Reserve Chair Jerome Powell is able to engineer a so-called soft landing for the economy. The bull case is further supported by continued signs inflation is easing, a still-robust job market and the breadth of market-buying activity since the start of the year. We'll be looking for any further commentary from Powell on rate hikes and the state of the economy when he delivers public remarks at the Economic Club of Washington, D.C., on Tuesday. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, Feb. 6 Before the bell: CNA Financial (CNA), Cummins (CMI), Onsemi (ON), Tyson Foods (TSN), Timken (TKR), IDEXX Labs (IDXX), Energizer (ENR) After the bell: Activision (ATVI), AECOM (ACM), Arrowhead Pharma (ARWR), Chegg (CHGG), Leggett & Platt (LEG), Simon Property (SPG), Skyworks (SWKS), Pinterest (PINS), Spirit Air (SAVE), Take-Two Interactive (TTWO) Tuesday, Feb. 7 Before the bell: Linde (LIN), Adient (ADNT), AGCO Corp (AGCO), Aramark (ARMK), BP (BP), Carrier Global (CARR), Centene (CNC), DuPont (DD), Fiserv (FISV), Graphic Packaging (GPK), Hain Celestial (HAIN), KKR & Co (KKR), Nintendo (NTDOY), Royal Caribbean (RCL) After the bell: Amcor (AMCR), Assurant (AIZ), Chipotle (CMG), Crown Holdings (CCK), Enphase Energy (ENPH), Fortinet (FTNT), Illumina (ILMN), Lumen Tech (LUMN), Omnicom (OMC), Prudential (PRU), RXO (RXO), Vertex Pharma (VRTX), VF Corp (VFC), Western Union (WU), Yum China (YUMC) Wednesday, Feb. 8 Before the bell: Emerson Electric (EMR), Brookfield Asset Management(BAM), Bunge (BG), Capri Holdings (CPRI), CDW Corp (CDW), Coty (COTY), CVS Health (CVS), Dominion Energy (D), Easton (ETN), Fox Corp (FOX), Penske Auto (PAG)Teva Pharma (TEVA), Uber (UBER), Wendy's (WEN), Yum Brands (YUM) After the bell: Walt Disney (DIS), 23andMe (ME), Affirm (AFRM), AllianceBernstein (AB), AppLovin (APP), AXA Equitable (EQH), AZEK (AZEK), Equifax (EFX), Goodyear Tire (GT), International Flavors & Fragrances (IFF), Mattel (MAT), MGM Resorts (MGM), Molina Health (MOH), O'Reilly Auto (ORLY), Plains All American (PAA), Robinhood (HOOD), XPO Logistics (XPO) Thursday, Feb. 9 Before the bell: AbbVie (ABBV), Arcelor Mittal (MT), AstraZeneca (AZN), Banta Corp (BN), Baxter (BAX), BorgWarner (BWA), CyberArk (CYBR), Duke Energy (DUK), Hilton Worldwide (HLT), Huntington Ingalls (HII), Kellogg (K), Masco (MAS), PepsiCo (PEP), Philip Morris (PM), S & P Global (SPGI), Tapestry (TPR), Toyota (TM), Warner Music Group (WMG) After the bell: Brighthouse Fin (BHF), Chemours (CC), Doximity (DOCS), Expedia (EXPE), Flowers Food (FLO), Genpact (G), Lyft (LYFT), Motorola (MSI), PayPal (PYPL) 8:30 a.m. ET: Initial jobless claims Friday, February 10 Before the bell: Enbridge (ENB), Fortis (FTS), Global Payments (GPN), Honda (HMC), IQVIA (IQV), Magna International (MGA), Mr. Cooper Group(COOP), Newell Brands (NWL) Looking back The ADP Employment report was released Wednesday, showing private companies added 106,000 new workers in January, below expectations for 190,000. Also Wednesday, the January ISM manufacturing purchasing managers' index (PMI) came in at 47.4%, below expectations of 48%, and marking the third consecutive month of contraction for the manufacturing industry. Lastly on Wednesday, the Fed's Federal Open Market Committee raised the federal funds rate by 25 basis points, in line with expectations. On Thursday, initial jobless claims for the week ending Jan. 28 came in at 183,000, a decrease of 3,000 from the prior week and below the 195,000 expected. At the same time, December factory orders rose 1.8% month-on-month, below expectations for a 2.3% monthly increase. Nonfarm payrolls for the month of January blew past expectations , coming in at 517,000, far above the 187,000 expected, the U.S. Labor Department said Friday. At the same time, the unemployment rate fell to 3.4%, the lowest level since May 1969 and below the 3.6% economists had predicted. Wage growth slowed in January year-on-year, to 4.4%, slightly more than the 4.3% predicted, and was down from the 4.6% rate seen in December. Also Friday, the January ISM services PMI came in at 55.2%, well above expectations of 50.5%, reentering expansion territory. Under the hood, communication services led to the upside this week, followed by technology and consumer discretionary, while energy led to the downside followed by utilities and health care. Within the Club portfolio, Caterpillar (CAT), Advanced Micro Devices (AMD), Humana (HUM), Meta Platforms (META), Eli Lilly (LLY), Honeywell ( HON), Estee Lauder (EL), Apple, Amazon (AMZN), Alphabet (GOOGL), Qualcomm (QCOM), Starbucks (SBUX), and Ford ( F) all reported quarterly results this past week. Meanwhile, the U.S. dollar index is hovering at around the 103 level. Gold is trading at just under $1,900 per ounce. West Texas Intermediate crude is hovering above $73 a barrel, while the yield on the 10-year Treasury is near 3.5%. Here's a quick look at our Club trades from this past week. Both were on Tuesday, Jan. 31. We sold 50 shares of Qualcomm. Jim Cramer's Charitable Trust owns 475 shares of QCOM, decreasing its weighting in the portfolio to about 2.14% from roughly 2.36%. We also bought 50 shares of Johnson & Johnson (JNJ). Jim's Trust owns 555 shares of JNJ, increasing its weighting in the portfolio to about 3.06% from 2.78%. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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Peter Kramer | CNBC