In Markets "In a Nutshell"

Markets “In a Nutshell” for February 10, 2025

Investment Week at a Glance

Stocks finished lower for the week. The Dow Jones Industrial Average fell 0.5%, the S&P 500 was down 0.2%, and the NASDAQ fell 0.5%. Foreign stocks (MSCI EAFE) were up, rising 0.2%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.49%.  (Data source: Wall Street Journal)

Labor Market Remains Healthy

The January jobs report was released last week and although total jobs came in below expectations, previous months were revised higher which led to unemployment falling to 4.0%. The 3-month average of job gains is now 241,000, above the 12-month average of 165,000. Unemployment also is well below the long-term average of 5.7% in the United States. Wage gains were also stronger than expected coming in at 4.1% year-over-year, above the expected 3.8%. While this may put pressure on inflation, it is a good sign that wages are increasing giving the consumer increased buying power as it has outpaced inflation since mid-2023. A strong consumer typically means strong economic growth in the U.S. as consumption drives GDP higher.

Earnings Continue to be Strong

Earnings season has been underway for a few weeks now as companies report their Q4 2024 earnings numbers. With about 60% of S&P 500 companies having reported, 77% have beat expectations. Guidance has also been strong, and estimates are that the market see 10%-15% earnings growth year-over-year. This would be the highest level of growth for earnings since 2021. Another expectation is that the spread in growth of earnings between value and growth will continue to shrink as the year goes on. Overall earnings growth looks to be strong for 2025 but there is some worry around tariffs and how that could affect short-term earnings growth for some companies.

Amazon Beats Earnings Estimates, Guidance Disappoints

Amazon reported earnings last week and earnings per share beat expectations by $0.37 per share. Revenue was also slightly higher than expected for the quarter at $187.79 billion. Although these numbers were strong, the stock dropped as guidance was weak as the company expected “an unusually large, unfavorable impact” from foreign exchange rates. They expect this to impact revenue by $2.1 billion for the next quarter. Amazon only expects revenue growth of 5%-9% in the first quarter, if that ends on the lower end it would be the slowest revenue growth on record for Amazon.

Quiz:

What did a 30-second commercial cost to air during the Super Bowl? (Scroll Down for Answer)

  1.   $8 million
  2.   $10 million
  3.   $12 million
  4.   $14 million

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

Answer:

1.  $8 million. Advertisers continued to spend big on Super Bowl commercials as the average cost of a 30-second commercial was $8 million.

 

 

 

 

 

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