Amid a relatively light economic calendar this holiday-shortened trading week, investor focus will be on Donald Trump's inauguration for his second term as US president.
Monday: Trump sworn in
With US markets closed in observance of Martin Luther King Jr Day, all eyes are on Washington, DC for Trump’s inauguration.
Analysts expect a flurry of activity as the new administration takes office.
“As a reminder, President Trump signed 55 executive orders during his first year in office during his last term, starting just hours after being inaugurated, when he signed an order designed to weaken regulations and procedures associated with enforcement of the Patient Protection and Affordable Care Act - a prominent campaign pledge at the time,” Deutsche Bank analysts wrote in a note to clients.
“We would not be surprised to see several executive orders signed this week focused on immigration, repealing Biden administration regulations related to the energy sector and the environment as well as measures aimed at addressing trade – in particular, trade with China.”
Analysts also expect executive orders in the coming weeks that will put pressure on Russia to end the war in Ukraine.
Tuesday: Netflix to report
Earnings season is ramping up as companies unveil their financial results for the fourth quarter. United Airlines Holdings Inc (NASDAQ:UAL, ETR:UAL1), Charles Schwab Corp (NYSE:SCHW) and 3M Co (NYSE:MMM) are set to report before Tuesday’s opening bell, with Netflix Inc (NASDAQ:NFLX, ETR:NFC) and Interactive Brokers to release their earnings after markets close.
Wednesday: More earnings
Earnings will continue to roll in on Wednesday, led by consumer goods firm Procter & Gamble Co (NYSE:PG, ETR:PRG) and pharmaceutical firms Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT).
Thursday: Initial jobless claims
Thursday's economic calendar features initial jobless claims data, forecasted at 230,000, up slightly from the previous reading of 217,000.
This report, aligning with the January employment survey period, is of particular interest as investors gauge potential labor market disruptions, including those caused by recent wildfires in Los Angeles.
The data will provide early signals on the state of the labor market as the Federal Reserve prepares for its January 29 meeting.
Friday: Housing and consumer sentiment updates
On Friday, the focus will shift to the release of existing home sales data, projected at 4.10 million units, slightly below the previous month's 4.15 million.
Also on the agenda is the final reading of the University of Michigan consumer sentiment index, forecasted to come in at 73.1, just below the preliminary reading of 73.2.
Deutsche Bank’s analysts do not expect either data point to gather much attention amid the activity in DC.
“That being said, Fed officials will likely keep an eye peeled toward long-run inflation expectations in the University of Michigan survey – which rose to the highest level since June 2008 in the preliminary report – as they prepare for the January 29 FOMC meeting,” they wrote.