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Next week is the start of the Q4'22 earnings season, and the December CPI Report is due on Thursday morning. In addition, KB Homes (KBH) will report earnings for its quarter ended Nov. 30, 2022 on Wednesday afternoon, which will give us insight into the housing market.

KBH Homes Earnings

What I’ll be paying attention to here is New Orders, as that is the most predictive of the future direction of the housing market. KBH New Orders dropped 50% in their quarter ended Aug. 31, 2022 and a similar drop off in New Orders this quarter would confirm my belief that the housing market is rolling over.

For whatever reason, the homebuilders – including KBH – have had a nice move over the last few months, which has gotten the technicians bullish. However, price follows fundamentals, so I’m anxious to see what they say.

December CPI Report

The next thing on my radar is the December CPI Report on Thursday morning at 8:30 a.m. EST. I think most investors are expecting a continuing decline in inflation, which would support the Fed in reducing its rate hike on Feb. 1 to 25 basis points. As you can see in the chart above, Fed Futures are pricing in a 76% chance of a 25 basis point hike on Feb. 1.

Bank Earnings

Lastly, the big four banks will all report earnings on Friday morning. This will be the focus of the week, as investors analyze whether there has been any increase in delinquency and default over the last three months as the economy is starting to contract. Has the weakness in the economy started to show in banks’ loan portfolios?

#earnings for the week https://t.co/lObOE0dgsr$TLRY $BAC $UNH $JPM $DAL $CMC $WFC $C $AYI $TSM $BLK $BK $ACI $SNX $KBH $WDFC $JEF $FRC $AZZ $ETWO $ACCD $APLD $OGI $SAR $NTIC $RFIL $WIT $INFY $NOTV pic.twitter.com/pL9n1P9Ei8

— Earnings Whispers (@eWhispers) January 7, 2023

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