S&P Hits New All-Time High, Indexes On Pace To Close Up For The Week Stocks closed higher yesterday with all of the indexes rallying into the close. The Dow led the way with a 0.93% gain. But it was the S&P 500 that made a new all-time high and close with a 0.53% gain. The Nasdaq was up 0.22%. Strong earnings last week and this week have helped lift stocks. That's great news, especially since stocks typically go up during earnings season. So, a better-than-expected earnings season could lift stocks even more than usual. Before the open yesterday, GE Aerospace posted a positive EPS surprise of 28.2%, and a positive sales surprise of 3.59%. That translated to a quarterly EPS growth rate of 103% vs. this time last year, and a sales growth of 46%. They were up 6.60% after the news. American Airlines also reported before the open, posting a positive EPS of 34.4%, and a positive sales surprise of 1.81%. That equated to a quarterly EPS growth rate of 196% vs. last year, and a sales growth of 4.59%. But weak guidance for a loss of between -20 and -40 cents in Q1 sent shares lower by -8.74%. After the close, we heard from Texas Instruments, which posted a positive EPS surprise of 9.24% and a positive sales surprise of 3.87%. That showed a quarterly EPS growth rate of -20.1%, and a sales growth of -1.72%. Shares were up 1.81% in the regular session, but were lower by nearly -4% in after-hours trade. Today we'll get earnings from another 50 companies, including American Express, Verizon and NextEra Energy to name a few. Next week there's 369 companies on deck to report, including 4 of the Magnificent 7 stocks with Microsoft, Meta and Tesla going on Wednesday (1/29); and Apple on Thursday (1/30). In other news, Weekly Jobless Claims rose by 6,000 to 223,000 vs. the consensus for 218,000. And the Kansas City Fed Manufacturing Index came in at -5 vs. last month's downwardly revised -5 (originally -4). Today we'll get the PMI Composite Index, Existing Home Sales and Consumer Sentiment. President Trump addressed the World Economic Forum in Davos, Switzerland (remotely) yesterday. He covered plenty of topics, including AI, tariffs, regulations, taxes, and telling companies that if they move their operations to the U.S., they'll enjoy the lowest tax rates than anywhere else. And if not, they'll likely get hit with tariffs. But it was an upbeat message of growth, not just for the U.S., but for the global economy. He also talked about interest rates. Specifically, he said that "with oil prices going down, I'll demand that interest rates drop immediately." The comments were noteworthy because he appeared to link oil prices to interest rates, believing that lower oil prices will help reduce the inflation rate. He also suggested that interest rates in other countries should come down as well. While the CME's FedWatch tool has a 100% probability that the Fed does NOT cut rates when they meet next week on Wednesday, 1/29, the Fed has indicated they expect to cut rates two times this year (presumably by 25 basis points each). In addition to watching the labor market and inflation, investors should now add oil prices to that list in order to get a read on what the outlook on interest rates might be moving forward. In the meantime, all of the indexes are up for the week, so far. And if they close that way, it'll be the second up week in a row. 2025 is off to a great start. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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