S&P At New All-Time Highs, Big Earnings And FOMC Announcement On Deck This Afternoon Stocks closed mostly higher yesterday, except for the Dow, which gave up -0.83%. The S&P was up 0.41%, and made a new all-time high in the process. The Nasdaq was up 0.91%. No new all-time high for them yesterday. But they are less than 1% away from making a new all-time high of their own. For context though, the Dow was partly dragged down by UnitedHealth Group, which plunged -19.61% yesterday. (The Dow is a price-weighted index, and with UNH coming into the day yesterday at over $351, and making up roughly 4.5% of the index, its decline negatively impacted the index's performance.) Insurance companies got hammered yesterday following Monday afternoon's report that the White House proposed a significantly lower rate increase for Medicare Advantage plans next year of 0.09% vs. the 4-6% that analysts were expecting. While this is for 2027 plans, it's taking an immediate toll on stocks. UNH is also a part of the market-weighted S&P. But they make up a much smaller percentage (about 0.50%). Other insurers in the S&P that fell yesterday include CVS, Humana and Centene, to name a few. But they too make up fractions of a percent of the index. Hence the smaller impact. In other news, yesterday's Richmond Fed Manufacturing Index improved to -6 from last month's -7. But Consumer Confidence fell to 84.5 vs. last month's upwardly revised 94.2 and views for 90.0. Today we'll get MBA Mortgage Applications, Retail and Wholesale Inventories, the International Trade in Goods report, and the EIA Petroleum Status report. But what everyone is really waiting for is the FOMC Announcement, and earnings from 3 big-tech names today. The Fed is expected to release their decision on rates this afternoon at 2:00 PM ET. Virtually nobody is expecting the Fed to cut rates this week (odds are only at 4.4% for a cut). Although, the likelihood increases to 15.4% in March, 29.4% in April, and 60.6% in June (when the new Fed Chair is expected to replace current Chair Jerome Powell after his term expires in May). But you can be sure everybody will be listening to Mr. Powell's Press Conference afterwards (2:30 PM ET), for insight on the Fed's outlook on inflation, economic growth and future rate cuts. After the close we'll hear from 3 of the Magnificent 7 stocks (Microsoft, Meta and Tesla). Combined, they make up over 10% of the index. On Thursday, we'll hear from another Mag 7 stock when Apple reports after the close. (They make up 6% of the index, second only to NVIDIA's 7%.) 3 more days left (counting today) until the budget deadline of January 30 hits for funding the government. Otherwise, we could be headed for a full or partial shutdown. The House passed all 12 appropriation bills to keep the government open. The Senate passed 3. But events over the weekend have created uncertainty over whether some of those other bills can get passed, namely the one funding the Department of Homeland Security. In the meantime, stocks are doing well. And with it being earnings season (stocks typically go up during earnings season), the market should keep its focus on that. If all goes well, we could be looking at more new all-time highs. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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