In Markets "In a Nutshell"

Markets “In a Nutshell” for January 27, 2025

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.2%, the S&P 500 was up 1.7%, and the NASDAQ rose 1.7%. Foreign stocks (MSCI EAFE) were also up, rising 3.2%. 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)

S&P 500 Hits All Time High

Equity markets have had a strong start to 2025 and the S&P 500 is back to making all-time highs. The strong start to 2025 is a welcome sign for investors after a weak December caused some worry for investors. One of President Trump’s first executive orders was to “make America the world capital in artificial intelligence.” The market seems to believe this administration will be more business friendly which is one reason for the recent move higher. One reason for this is the expectation of lower taxes and deregulation which helps companies grow larger. Another hope for investors is to see more merger and acquisition activity as well as companies going to the public markets.

Earnings Season Underway

Earnings season has kicked off and the market will be paying close attention this week as Meta, Tesla, Microsoft, and Apple are all set to report this week. Expectations are high for earnings growth as net income is expected to rise by 12.7% vs Q4 of 2023 which would be the highest earnings growth rate in 3 years. Investors will also be paying close attention to what is said during these earnings calls as companies may mention the effect of tariffs, immigration policy, lower taxes, and deregulation might affect their business. Exxon & Chevron will report earnings on Friday and many will be interested to see how they navigate the new administration wanting to drill more but the companies looking to reduce costs.

DeepSeek AI Sends Software Stocks Lower

DeepSeek is a Chinese AI startup that is just over a year old and is currently the #1 app on the app store. The company looks to compete against other AI giants in the US and has seemed to create a model just as competitive at a fraction of the cost. The main cause for sending U.S. AI companies lower is they claim it was developed in under 2 months at a cost of less than $6 million. This has raised questions about the billions of dollars U.S. companies have dumped into AI and whether or not it was needed. NVDA is taking the biggest loss on this news, down over 17% Monday morning.

Quiz:

Who is the top oil producer globally? (Scroll Down for Answer)

  1.     United States
  2.     Saudi Arabia
  3.     Russia
  4.     Canada

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

Answer:

1.   United States. The United States produced 22% of the World’s oil production in 2023. The next largest producers were Saudi Arabia and Russia, each producing 11%.

 

 

 

 

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