Last week Apple (AAPL) beat earnings but shares plunged lower on slower-than-expected sales of their flagship phones. They also announced the continuation of their plan to move more of their iPhone production away from China and to India. 

To further add to the excitement Fitch downgraded the US debt from AAA to AA+ based on deteriorating economic conditions in addition to acceleration of interest rates on future debt offerings. As one would expect the market reacted negatively selling off overnight and again during the next session but started to rebound on Friday with the S&P 500 ($SPX) (SPY) closing down a little over 2% on the week. This week looks like we have some possible event risks with the news and earnings coming out. Here are 5 things to watch in the market this week:   

Earnings

Even with most of the banking and tech behind us, there are still some big names reporting this week. Monday we have KKR & Company (KKR) before the opening bell as well as Palantir (PLTR) after the bell. On Tuesday we have Eil Lilly (LLY) and United Parcel Service (UPS) reporting before the market opens as. Big names on Wednesday include Disney (DIS) and The Trade Desk (TTD) which both report after the close for the day. This earnings season seems to be giving us a theme of earnings beats but trading lower on guidance issues. This week we will see if that continues to play out.

10 Year Auction

On the news front, it is pretty quiet the first half of the week. Wednesday at 1 pm Eastern time the 10-year bond auction is held. Rates have been climbing steadily over the past several months at these auctions. With the increase in the Fed Funds Rate, this is an expected result, however, with the 10 and 30-year trading almost at parity on the open market it could be inferred that investors require more risk premium for shorter-dated securities. If the actual auction results tick over the 4% mark we could also see mortgage rates continue on their upwards trajectory which could have a more lasting impact on housing. While these are not short-term effects, they are something to watch on a more macro scale.

CPI

With rates continuing to climb, hopefully, CPI continues to fall. A lower-than-expected CPI could be viewed positively by the markets because it would mean that the Fed has a handle on inflation. If the CPI comes in higher than expected on any of the categories, it's possible the market slips a little on fears that inflation could start back up again. 

PPI

Similar to CPI, the PPI comes out Friday at 8:30 am Eastern time. This is the price of finished goods sold by producers excluding food and energy, which are typically the two categories with the highest price inflation. Also similar to CPI, if headline numbers come in lower than expected the market could take that as a positive. If, however, the PPI comes in higher than expected the market could slip as it could see prices starting to rise again going into the fall.

UoM Consumer Sentiment

The final news announcement of the week is the University of Michigan Consumer Sentiment report Friday at 10 am EST. This is a survey about how people view the economy and the short-term future of economic conditions. The last two releases have been pretty solid beats, but with rates on the rise again it's possible this month there is a change. If that is the case we could see markets slip as it braces for potential economic slowdowns. If it is another beat, though, we could see the general market rise on a positive economic outlook. One point on this report, it is a small sample of about 500 households. Another solid leading indicator is guidance from company earnings, and those have been almost universally lower. This divergence means that one of them is likely wrong. 

Best of luck this week and don’t forget to check out my daily options article.

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