In Markets "In a Nutshell"

Markets “In a Nutshell” for January 21, 2025

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 3.7%, the S&P 500 was up 2.9%, and the NASDAQ rose 2.4%. Foreign stocks (MSCI EAFE) were also up, rising 0.9%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.62%.  (Data source: Wall Street Journal)

Inflation Comes in Lower Than Expected

The December CPI report was released last week and gave a boost to both the equity and bond markets. CPI came in as expected at 2.9% year-over-year, but the surprise was in the Core-CPI number at 3.2%, better than the 3.3% expected. Core-CPI has seemed to become the barometer for the Fed as far as inflation goes as it excludes the changes in food and energy prices as they are traditionally more volatile. This was the first drop in Core-CPI since July and eased investors’ fears of inflation picking back up. Wage growth came in at 3.8% year-over-year, the smallest number since the pandemic. This is another sign of inflation continuing to ease but it is also positive that wages are growing faster than prices.

S&P 500 Earnings Expected to Rise

The market has been focused on the Fed and rates for quite some time now but another area the market pays attention to is earnings. While rates impact valuations and create short-term volatility, earnings are what drive the market in the long run. 2025 estimates are that earnings growth for the S&P 500 will be 14.5%, the highest since 2021. If companies are able to deliver on these high expectations for earnings growth it could be positive news for markets as we move throughout 2025. Another expectation is that the growth in earnings will be spread out among companies rather than just seeing the mega-cap companies have strong growth.

TikTok Restored in the United States … For Now

TikTok was disabled for its 170 million American users late on Saturday as the TikTok ban was set to go in place on Sunday. However, TikTok has now been restored for American users as President Trump has ensured no penalty would be enforced on ByteDance, the parent company of TikTok. President Trump says he would like to see 50% ownership from an American company to ensure the safety of American data. Indications are that TikTok will have 90 days before a ban now goes into effect. Investors will keep a close eye on a possible buyer as people estimate TikTok to be worth anywhere from $20 billion to $200 billion. (CNBC)

Quiz:

When did the NYSE & NASDAQ begin to close for Martin Luther King Jr. Day? (Scroll Down for Answer)

  1.    1972
  2.    1983
  3.    1998
  4.    2008

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

Answer:

3.   1998. The NYSE & NASDAQ first took the fill day off in 1998 to honor Martin Luther King Jr. This is one of 10 holidays for the NYSE & NASDAQ.

 

 

 

 

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