The S&P 500 Index remained on edge near its all-time high of $6,945 as investors prepared for the new year. It remains nearly 42% above its lowest level in April last year. This article highlights some of the top news that will drive the S&P 500 Index, SPY, and VOO ETFs this week.
The Venezuela invasion to have a limited impact
One of the top S&P 500 Index, SPY, and VOO ETF news to watch this week is what happened during the weekend. In a statement, Donald Trump announced that the US had taken Nicolas Maduro and his wife.
The two have now been charged in New York. At the same time, he announced that the United States will now be in charge of the country, with its oil companies investing billions of dollars in the energy sector.
Still, while the event are significant, chances are that their impact on American equities will be limited. That’s because Venezuela has not been a large player in the energy sector for decades, with its daily production being less than 1 million barrels.
S&P 500 Index to react to key macro data
American stocks will react to key macro numbers that will have an impact on the next Federal Reserve. The first key data will be the upcoming US manufacturing and services PMI reports by ISM and S&P Global. This is an important report that provides information on the state of the economy.
The manufacturing PMI is expected to show that the sector continued to contract in December. It has been in a contraction phase for nearly 12 months now. This is confirmed by the official jobs numbers, which show that manufacturing numbers have been in the red since June last year.
The other important macro numbers will be the upcoming US non-farm payrolls (NFP) data on Friday this week. Economists polled by Reuters expect the data to reveal that the US created over 55,000 jobs in December, while the unemployment rate retreated from 4.6% to 4.50%.
These numbers will be important as they will have an impact on the Federal Reserve later this year. While analysts expect the bank to leave rates unchanged this month, a weak jobs report would put pressure on the bank to consider cuts in March.
The other key macro data to watch this week will be the ADP jobs report, which will come out on Wednesday.
Earnings and holiday updates
The other catalyst for the S&P 500 Index and its ETFs will be earnings by some large American companies. These earnings will come a week before the earnings season starts.
The first main earnings reports to watch will be companies like Constellation Brands, Jefferies Financial Group, and Albertsons. Meanwhile, RPM International and Mohawk Industries will release their results on Thursday.
While all these are large companies, their impact on the S&P 500 Index and its ETFs, like VOO and SPY, will be limited as investors will be focusing on the real earnings season that starts next week.
Traders will also watch other companies like Walmart, Target, and Kroger that will publish results on their holiday season shopping.
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