January’s market rally faces a major test in the week ahead from multiple major events, the most important of which could be the Federal Reserve’s interest rate announcement and press conference. The Fed’s meeting Tuesday and Wednesday comes amid a flood of corporate earnings reports, with about 20% of the S & P 500 reporting that week. The most important day for earnings is Thursday, when Apple , Alphabet and Amazon report after the bell. There is also important economic data with the employment cost index out on Tuesday and Friday’s January jobs report. Both will be watched for signs of how much the central bank has cooled the labor market with its rate hiking. That could provide some rough guidance as to how much more the Fed will seek to raise rates. “The markets are at an inflection point,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “I think it’s going to be a critical week. We’re still on the defensive, but there’s a lot of important data points that could shift this market.” Stocks have rallied since the start of the year, with the most beaten-down names outperforming. Two big loser sectors in 2022, tech and communications services, have led the market higher and are on track for double-digit gains this month. The Nasdaq Composite was up 11% for the month as of Friday afternoon, well ahead of the 6.5% gain in the S & P 500. Traders have been watching the S & P 500 edge closer to the key threshold of 4,100 , its high from December. The index closed at 4,070 Friday, with a 2.5% gain for the week. .SPX 1Y line s and p “We’re at the top end of this trend line. We’re either going to break out in a convincing way, or we’re going to roll back over,” said Lerner. “We’re going to get what this market cares about most — the Fed and earnings.” Earnings so far are beating expectations at about a 68% pace, according to Refinitiv, but some of the guidance has been troubling. “For every great report, American Express , Chevron, there’s a company that’s getting punched in the nose, like Intel, ” said Art Hogan, chief market strategist at B. Riley Financial. He said Apple, the stock with the largest market cap, has the potential to turn the market one way or other. “You’ve got a company that sold off precipitously in the beginning of the year to $125, and now it’s closer to $150. It’s not priced for perfection, but it’s priced for better news, a beat and a raise,” said Hogan. “If there’s one company that has the potential to…
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