Asset Management
02/02/2026 Market Strategy
February 02, 2026
Keep the Faith, Baby
Another Busy Week Ahead with Earnings and the Jobs Report on Tap
Key Takeaways
- Investors rotated and rebalanced portfolios again last week but with a more risk -averse stance, sending the S&P 500 up by 0. 3% while the mid - and small caps declined by 1.4% and 2.2% respectively.
- Earnings season is off to a strong start. With a third of companies having reported, earnings growth reached 15.3% on back of revenue gains of 7. 4 %. Six sectors are showing earnings growth, with three at double -digit rates. Five sectors are seeing declines, with three at double -digit rates.
- This week 129 companies are scheduled to report followed by 84 firms the week of Feb. 9.
- Last week’s Conference Board survey of consumer confidence showed a sharp decline in January, in contrast to the Michigan survey which showed an uptick. This week brings the preliminary reading for the Michigan survey for February, which could bring more clarity.
- This week brings the first indications of economic activity in January. The ISM reports are due early in the week, capped by the nonfarm payroll survey on Friday. The median estimate in Bloomberg’s survey is for a rise of 68,000 jobs in the month.
With 129 S&P 500 companies scheduled to report stateside this week and the non -farm payroll number due on Friday and a host of other key US data sandwiched in between offer market participants and traders much to ponder.
Last week saw an assortment of bonds, stocks, gold and silver “run the gauntlet” to the President’s announcement of Kevin Warsh as Fed Chair candidate.
This means market action could dance from theme to theme through most of this week with the direction of the markets prone to shifts from “risk on” to “risk off” resulting in some roundtrip action through the week depending on the data du jour.
The good news is that so far, the underlying economic and corporate fundamentals remain overall positive with data along with earnings growth suggesting to us that there’s enough resilience for stocks to withstand and navigate some choppiness near term.
Some Sanity in Washington?
News flow over the weekend showed participation and progress from bipartisan moves toward reconciliation over the budget and avoidance of another government shutdown.
The stock market of late has favored day -to -day rotation and rebalancing movements as traders and investors seek out trends which could help define a clearer vision for the direction the market will take in the first quarter of 2026.
The Energy Sector Gets Some Gas
One month into the new year one of recent years’ biggest laggard sectors —energy—has performed best among the seven sectors (the six others are materials, consumer staples, industrials, communications services, real estate, and consumer discretionary) that have outperformed the underlying index and the four other sectors. (see graph nearby).
The four underperforming sectors year to date as of last Friday’s close include utilities, health care, information technology, and financials.
After a strong start to the year that has favored at times growth over value and at other times value over growth, the clear message for now in our view is diversification favored over concentration.
While small and mid -cap stocks have benefited in a market capitalization play the day -to -day action suggests traders and investors remain unconvinced as to whether 2026 will see the small and mid s pull ahead of large cap stocks in a sustainable fashion.
Monetary policy in our view still to some extent holds the small and mid cap stocks hostage without two more (albeit modest) cuts by the Fed this year.
129 S&P 500 Companies Are Scheduled to Report this Week
Earnings season continues to show strength in results of the companies that have thus far reported. With 165 or a third of firms in the S&P 500 having reported earnings are up 15.3% year over year on back of revenue gains of 7.4%. Prior to the start of earnings season FactSet called for earnings growth at 8.3% from a year earlier. So far, some 79% of firms reported have beat analyst expectations.
The Nonfarm Payrolls Survey Takes Center Stage on Friday
With President Trump’s announcement on Friday of the selection of Kevin Warsh as successor to Jerome Powell, an overhanging worry for market participants about the direction and independence of the next Fed Chair may have abated given Mr. Warsh’s reputation and history.
The main focus this week is likely to be the jobs and unemployment numbers on Friday. The consensus estimate is for a payrolls gain of 68,000 for January (up from December’s 50,000 gain) and for the unemployment rate to remain unchanged at 4.4%.
Last week saw an assortment of bonds, stocks, gold and silver “run the gauntlet” to the announcement of Mr. Warsh as Fed Chair.
Traders, skeptics and nervous investors will likely look for anything that could be seen as a catalyst to take profits (on their equity positions) without FOMO (fear of missing out) in the near term.
We remain positive in our outlook for the markets this year and favor diversification across asset classes, sectors, market capitalizations, and style.
We continue to overweight equities and see fixed income as complementary to equities and useful for current income and diversification.
Name:
John Stoltzfus
Title:Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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