Investing Action Plan: Navigating A Skittish Stock Market

The Nasdaq Composite, S&P 500 and the Dow Industrials ended lower for a second straight week as concerns over rising Russia/Ukraine tension weighed on investors confidence. All three benchmarks held above prior lows, leaving the stock market’s attempted uptrend intact, although under increasing pressure. Stocks including Matador Resources, Vale and Ultra Clean Holdings are near buy points with earnings due in the coming week. And consumer spending data due Friday could give the market a shot in the arm — if Western countries manage to dismantle Russia’s momentum toward invading Ukraine.

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Five Stocks Near Buy Points

Apple (AAPL), Commercial Metals (CMC), Union Pacific (UNP), Oneok (OKE) and Hilton Worldwide (HLT) are five stocks near buy points with relative strength lines at or near highs. Apple has formed a cup-with-handle base with shares slightly below the 50-day line. Commercial Metals and especially Union Pacific are building the right side of shallow consolidations. Oneok has formed a handle in its base. Hilton has pulled back from the buy zone but the entry remains valid amid generally positive headwinds for hotels and travel stocks.

Real Estate, Construction, Home Improvement Supply Chains

Investors will receive a look at home building, remodeling and materials supply chains from multiple angles in the coming week, as Home Depot (HD), Toll Brothers (TOL) and Boise Cascade (BCC) all report earnings. Lowe’s (LOW), Louisiana Pacific (LPX), Cornerstone Building Brands (CNR) and TopBuild (BLD) are also due to report. All are seen turning in strong EPS gains, except for LPX. Most of the stocks are basing, however Boise Cascade is extended, near highs and sitting on a 12-month gain of 73%. CNR broke out this week on takeover news.

Economic Calendar: Just how strong is the consumer?

Investors will get a clearer answer with release of January’s personal income and spending report on Friday at 8:30 a.m. ET.

The past week’s surge in January retail sales — up 3.8% on the month — appeared to show that consumers are shrugging off high prices and that late-year softness mostly reflected a frontloading of holiday shopping to October.

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One question the report will answer is whether retail spending strength was offset by service-spending softness amid the omicron surge. We’ll also learn how much spending grew in real terms, with the report’s latest read on the Fed’s favored inflation gauge, the personal consumption expenditures price index.

Thursday’s initial jobless claims data, released at 8:30 a.m., will carry greater weight in the coming week after the latest report showed new claims unexpectedly rising 23,000 to 248,000 in the week through Feb. 12. It’s easy to overlook one soft week, but another might begin to raise questions about how well the economy is withstanding inflationary pressures.

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