Market Recap Week of 1/23/2023 Through 1/27/2023

The S&P 500 index rose 2.5% last week, led by the consumer discretionary and technology sectors, as US Q4 gross domestic product came in better than expected, as did some companies’ financial results for the quarter.

The index has risen in three of the four weeks of 2023, putting it up 6% for the year to date.

Last week’s climb came as data showed the US economy grew more than expected in Q4, though the pace of economic growth was slower than in Q3. Real gross domestic product in the December-ended quarter increased at a 2.9% annualized pace, according to the Bureau of Economic Analysis, surpassing the consensus estimate according to Econoday of a 2.7% rise. In the third quarter, real GDP advanced 3.2%. Despite the sequential slowdown, the better-than-expected report helped ease investors’ recession fears.

Some companies’ quarterly financial results also managed to surpass consensus expectations even as they are grappling with higher rates and inflationary pressures. While not all companies’ results have topped Street views, investors have been encouraged by those that have.

All but two sectors in the S&P 500 rose last week. The gainers were led by the consumer discretionary sector, up 6.4%, and technology, up 4.1%. Other strong gainers included communication services, up 3.3%; real estate, up 2.8%; and financials, up 2.5%.

Health care slipped 0.9% and utilities fell 0.5%.

This week’s earnings calendar features companies such as Exxon Mobil (XOM), Pfizer (PFE), McDonald’s (MCD), United Parcel Service (UPS), Caterpillar (CAT), Facebook parent Meta Platforms (META), Apple (AAPL), Google parent Alphabet (GOOG, GOOGL), Amazon.com (AMZN), Eli Lilly (LLY) and Merck (MRK).

Economic data being released next week include January consumer confidence on Tuesday. However, a Federal Open Market Committee meeting that begins that day and concludes on Wednesday, as well as January employment data due on Friday, will receive the most investor attention.

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