Stocks Up For The Second Week In A Row Last Week; Earnings, The Fed, And Inflation All On Tap This Week Stocks closed moderately lower on Friday, but solidly higher for the week. The Dow was the biggest gainer last week with 2.15%, followed by the S&P 500 with 1.74%, and the Nasdaq with 1.65%. The small-cap Russell 2000 was up 1.40% and the mid-cap S&P 400 was up 1.11%. YTD, however, the biggest gainer is the mid-cap index with 4.96%. The Dow is next with 4.41%, then the S&P 500 with 3.73%, the small-caps with 3.48%, and finally the Nasdaq with 3.33%. The markets took a breather on Friday, but after such an auspicious start to the year, a little bit of profit taking is not surprising. Earnings season continued last week. We're two weeks into the unofficial start to Q4 earnings season, although just a half-week into the official 'official' start. Regardless of how you slice it, earnings season is off to a great start. And 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. After stellar bank earnings the week before, and big numbers from a whole host of companies last week, including Netflix with their 102% quarterly EPS growth rate, we'll get another 369 companies on deck to report this week. We'll also hear from 4 of the Magnificent 7 stocks with Microsoft, Meta and Tesla going on Wednesday (1/29); and Apple on Thursday (1/30). In addition to earnings, investors will be watching Wednesday's (1/29) FOMC Announcement, and subsequent Fed Chair Press Conference. While the CME's FedWatch tool has a 99.5% probability that the Fed does NOT cut rates this week, everyone will be listening for clues as to what their outlook is for March 19 (they don't meet in February), and beyond. At the moment, the odds are just 28.3% for a cut in March. Nonetheless, the Fed has indicated they expect to cut rates two times this year (presumably by 25 basis points each). Although, they did reduce that from four previously. It will also be interesting to see if the Fed mentions anything about tariffs (which they did a fair amount last time), and President Trump's latest comments about demanding rates be cut "immediately" as oil prices fall. As for tariffs, people seem split on whether they will increase inflation and/or slow down the economy. It's useful to know that tariffs during the first Trump administration did not increase inflation. But these are different times. Regarding inflation, Jamie Dimon, just last week said, "if it's a little inflationary, but it's good for national security, so be it. I mean, get over it." The takeaway I believe he's making is, if inflation does go up a "little" in the aggregate, it's not going to hurt the economy, so not to worry. After the Fed meeting, we'll get the Fed's favorite inflation indicator, the Personal Consumption Expenditures (PCE) index on Friday, 1/31. The recent CPI (retail inflation) and PPI (wholesale inflation) numbers both came in as expected to slightly better. And the market breathed a sigh of relief, i.e., stocks rallied. Another friendly report could have the same effect once again. In the meantime, stocks are having a great 2025, so far. The year is young. But great is still great. We'll see if the market can add to their gains this week, especially after the S&P made their first new all-time high of the year last week. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
Tidak ada komentar:
Posting Komentar