US Stocks Set To Open Weaker As Traders Eye Key Main Street Events: Analyst Sees Buying Opportunity On ‘Stunning’ Earnings Expectations

The negative sentiment observed in the stock market at the beginning of the year appears to persist, with index futures pointing to a lower opening on Wednesday. Several market-moving catalysts, including the release of the Fed minutes, a Federal Reserve speech, and JOLTS data, could influence the day’s market movement. Despite the discouraging start to the year, analysts remain optimistic that momentum will carry through into 2024 as headwinds subside.

Cues From Tuesday’s Trading:

Technology stocks led the market lower in the first trading session of the year, as investors sold off stocks amid concerns about valuations and uncertainties regarding the economy’s trajectory in the new year. Shortly after the market opened, S&P Global’s final manufacturing purchasing managers’ index revealed a more significant-than-expected contraction by the sector in December.

The tech-heavy Nasdaq Composite concluded sharply lower, and the broader S&P 500 Index also settled down, albeit with a more modest loss. Both averages remained in negative territory throughout the session.

The Dow Industrials started lower but underwent some volatility before finishing marginally higher, with robust gains by healthcare and financial stocks contributing to offset the weakness in the technology sector. Consequently, the index achieved a fresh closing high.

Analyst Color:

A fund manager suggested weakness as the one seen Tuesday should be considered as buying opportunities, premising his optimistic market outlook on earnings. “We are going to have a stunning earnings announcement season,” said Louis Navellier, adding, ”The earnings are going to be great for the next three quarters due to easy year-over-year comparisons.”

Navellier also sees decent fourth-quarter economic growth as consumers splurged on purchases during the holiday season. Also, as an added incentive, the Fed will likely begin cutting rates, he said.

“Markets do oscillate and we got overbought, so we have to give a little back,” Navellier said. Tuesday’s pullback is a ”buying opportunity, especially the big tech stocks,” he said.

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