Indices
- Dow 44,424, +937 or +2.16%.
- Nasdaq 19,954, +324 or +1.65%.
- S&P 6,101, +105 or +1.75%.
- MSCI EAFE 2360.81, +46.68 or +2.02%.
- USD10Y 4.626%, +1.7bp or +0.37%.
- WTI Crude $74.60/bbl, -$3.28 or -4.21%.
Week One in the Books
The first week of the new administration saw another big rally in the markets (corporations and their bottom lines tend to favor fewer regulations and fewer taxes). While multiple pronouncements were made regarding tariffs, lowering interest rates, and shuttering TikTok, nothing has been implemented as of the time of this writing.
The second week of Q1 earnings season ended in mixed fashion. Netflix (NFLX) absolutely crushed the Street’s expectations, adding 19 million subscribers in the fourth quarter and 42 million in all of 2024. Each subscriber watches an average of two hours of programming a day and seven films per month! United Airlines (UAL) posted good numbers while American Air (AAL) disappointed the Street and Boeing (BA) continues to be a disaster, preannouncing a $4 billion quarterly loss. The airline and aerospace manufacturer has not posted an annual profit since 2018! One thing that we will be keeping our eye on is the fact that trucking freight and logistics company JB Hunt (JBHT) missed earnings two weeks ago and last week rail freight and logistics company CSX (CSX) missed their earnings. That puts shipping giant UPS squarely in focus when they report their earnings this coming week as a potential proxy for the health of the U.S. consumer and economy.
The Upcoming Week: Jan 27 – Jan 31
Normally a week containing a Federal Open Market Committee rate decision meeting would be considered a big week. However, with the ongoing display of strength in the U.S. economy as well as stubborn inflation data, the CME Fed Watch Tool puts the probability of a rate cut at nearly zero. Thus, the focus will be on earnings, and it is a big week in Tech land which means it's a big week for the markets. Three of the magnificent seven are reporting this week; Tesla (TSLA), Apple (AAPL), and Meta (META formerly Facebook).
Economic Calendar
- Monday – N/A. Earnings: N/A.
- Tuesday – December Durable Goods Orders. Earnings: General Motors (GM), Starbucks (SBUX).
- Wednesday – Federal Reserve Interest Rate Decision and Fed Chair Powell’s Press Conference. Earnings: Meta (META), Tesla (TSLA).
- Thursday – Initial Jobless Claims, Q1 GDP. Earnings: Southwest Air (LUV), UPS (UPS), Apple (AAPL).
- Friday – December Personal Consumption Expenditure. Earnings: Exxon Mobile (XOM), Chevron (CVX).
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Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets...Bitcoin, Ethereum, Solana, ACHR, BITB, NVDA, and RIVN.