Stock final The first week of February changed slightly as investors spent corporate returns from major technology companies, a hotter January January report report, and ongoing updates on President Trump's tariff policies.
For the week, the S&P 500 (^Gspc) roughly flat, while NASDAQ compound (^Ixic) And Dow Jones' industrial average fell by about 0.4%.
In the coming week, inflation will take the stage, with the Consumer Price Index (CPI) about to be released on Wednesday morning. Updates on wholesale inflation and retail sales will also be closely tracked.
On the Corporate Front, 78 S&P 500 Companies, including McDonald's (Mcd), Coca-Cola (That), Super Micro Computer (Smi), and Airbnb (Abnb), about to report earnings.
The January Jobs Report released on Friday Continuous signs of resilience In the labor market as the unemployment rate fell unexpectedly, wages grew more than expected, and the December Monthly Job earnings were higher to show that the US labor market left 2024 on an even better foundation than reportedly reported Previous.
This motivated economists to argue that the Fed will not be likely to cut interest rates at any time soon. And if anything, he puts more pressure on inflation to show cooling before the central bank reduces borrowing costs.
“The more recent data is a sign of a labor market that has recovered its base,” wrote a senior economist Wells Fargo, Sarah House, in a note on Friday. “This suggests that the tail risk of a sudden decline in the labor market has decreased, and as a result the FOMC can wait to see how Ch1 inflation data and make an economic policy play out before taking further action on the federal fund rate.”
Stocks rebounded after dropping to start Monday As President Trump's 25% tariffs on Mexico and Canada are delayed at least a month. But what happens exactly with tariffs remains overlapping on markets as investors discuss the potential impact on inflation and, subsequently, monetary policy.
On Friday, Trump say He would publish a plan on bilateral tariffs on American imports. The comments were made during a meeting with Japan's Prime Minister Shigeru Ishiba. Trump said tariffs on Japan are an option.
In a research note on Friday, Blackrock Global Standing Income Chief Investment Officer Rick Rieder said it would probably take two weak job reports to stimulate discussion about the Fed resuming its interest rate cutting cycle. But he added that the risks around Trump's policies, including tariffs and immigration conflicts, mixed forecasts.
“While we and the Fed keep our eyes focused on these payroll reports (and inflation), we also have to watch the news in the flow of confidence in coming down rates Closer to a long -term neutral level, “Rieder wrote.
Washington DC, USA – Ion. 29: US Federal Fund Chair Jerome Powell speaks as the US Federal Fund retains a benchmark policy rate at 4.25% -4.5% as widely expected on January 29, 2025 in Washington DC, United States. (Photo by Yasin Ozturk/Anadolu via Getty Images) ยทInfirmed by Getty's images
With the focus of investors now square back on inflation data for tips of interest rates cuts, a new update at the speed of price increases is being slated for release on Wednesday.
Wall Street economists expect January CPI to show a headline inflation of 2.9% in January, a flat from the previous month. Prices are forecast to rise by 0.3% from month to month, per economist projections, lower than 0.4% increased in December.
On the basis of “core”, which eliminates food and energy prices, CPI is expected to rise by 3.1% over last year in January, below 3.2% seen in December. Monthly rises in core prices are projected to clock in at 0.3%, above the 0.2% observed the previous month.
The first monthly retail sales report in 2025 is expected to be released on Friday. Economists estimate that retail sales were flat over the previous month during January. But the control group of retail sales – which exclude several volatile categories such as gasoline and feeds directly to gross domestic product (GDP) – has also risen 0.4%, down from the increase of 0.7% seen in December.
With more than 62% of S&P 500 companies made reporting earnings, the year -on -year growth rate for the index continues to move higher. From Friday, the S&P 500 packed for earnings growth of 16.4% compared to the previous year. This would indicate the fastest pace of growth in three years and is above the 11.8% of gains that growth analysts had expected at the beginning of January.
Although earnings have been beating expectations, macro factors have continued to create a stop and go market operation as stocks have failed to find a clear direction. On Friday, stocks slipped lower after the latest Michigan University Consumer Feeling Survey He showed the expectations of respondents' year inflation hit their highest level since November 2023.
One-year inflation expectations jumped to 4.3% in February from 3.3% last month, noting the fifth time in 14 years that the survey noted a 1 percentage point increase or more in the back-year inflation expectations.
The statement noted that the leap in the inflationary expectations “partly due to perception that it might be too late to avoid the The negative impact of tariff policy. “
Stocks reversed a course on the news, with the three large average flipping from green to red. And while that equates to just a small sampling of market action, it reminds us that what tariffs mean to inflation is square in terms of markets before a week expected to provide updates on both fronts .
Economic Data: New York fed year inflation expectations, January (previously 3%)
Economic Data: NFIB Small Business Optimism, January (Expected 104.7, 105.1 Previous)
Earnings: Bp (Bp), Coca-Cola (That), Doordash (Ruthin '), Humana (Mumble), Lyft (Book), Marriott International (Meal), Shopify (Shopping), Super Micro Computer (Smi), Upstart (Upstate), Zillow Group (Z)))
Wednesday
Economic Data: Consumer price index, month over month, January ( +0.3% expected, +0.4% previously); Core CPI, month over month, January ( +0.3% expected, +0.2% previously); CPI, year on year, January ( +expected 2.9%, +2.9% previously); Core CPI, year after year, January ( +3.1% expected, +3.2% previously); Earnings per hour on a real average, year on year, January (+0.7% previously); MBA Mortgage Applications, Week Ending Feb 7 (+2.2% Previous)
Earnings: Albermarle (Alb), Biogen (Peanut), Health CVs (Cvs), Cisco (Csco), Dutch Bros (Brush), Generac (Gnrrc), The strength of Heinz (Khc), MGM destinations (Mgm), Reddit (Redden), Robinhood (Hood), The trading (Ttd)))
Economic Data: Producer price index, month over month, January ( +0.2% expected, +0.2% previously); PPI, year on year, January ( +3.2% expected, +3.3% previously); Initial work claims, the week ends on February 8 (previously 219,000);
Earnings: Airbnb (Abnb), Applied materials (Right), Coinbase (Map), Crocs (Crox), Datadog (Dog), Duke Energy (All), Draftkings (Dkng), John Deere (Of), Palo Alto Networks (Pant), A year (Year), Sony (Sony), Twilight (Steal), Wynn destinations (White)))
Economic Data: Retail sales, month over month, January ( +0% expected, +0.4% previously); Pre-auto and gas retail sale, January (+0.3% previously); Import price index, month over month, January ( +0.4% expected, +0.1% in advance); Export prices, month over month, January ( +0.3% expected, +0.3% previously); Industrial production month over month, January ( +0.3% expected, +0.9% in advance)
