Weekly Market Insights | Shifted Policy Gears Rev Markets

Brent Foster

January 27, 2025

Stocks rallied last week as investors reacted positively to a handful of better-than-expected corporate earnings reports and developments out of Washington, D.C. like the optimism that the Trump administration will reduce taxes and regulations.

The Standard & Poor’s 500 Index gained 1.74 percent closing at 6,101.24. It reached a record intraday high of 6,128.18 on Friday but ended the session slightly below the record closing level of 6,118.71 posted on Thursday. The S&P 500 is now up 3.7% for the month and 25% from a year ago. The Nasdaq Composite Index added 1.65 percent closing at 19,954.30 after reaching fresh highs during the week. The Dow Jones Industrial Average rose 2.15 percent closing at 44,424.25. The MSCI EAFE Index, which tracks developed overseas stock markets, added 3.03 percent.^1,2

Flurry of News

The week had only four trading sessions as the US stock market was closed on Monday for Martin Luther King Jr. Day. Monday was also Inauguration Day, marking the start of President Donald Trump's second term. Investors are hopeful the newly inaugurated president will follow through on plans to cut taxes and regulations.

Markets surged over the first three trading days as investors cheered a flurry of new policy announcements and executive orders following Monday’s inauguration. For example, investors responded to news that the White House trade team is considering taking a softer stance on tariffs.³

It was also a good week for Q4 company reports and other upbeat corporate news.⁴

Markets leveled off Friday as investors were disappointed that existing home sales fell to a 30-year low.

Sentiment was also boosted by stronger-than-expected quarterly earnings from companies including GE Aerospace (GE), Union Pacific (UNP) and Netflix (NFLX).

By sector, communication services had the largest percentage gain of the week, up 4%, followed by a 2.9% increase in health care and a 2.4% rise in industrials.

Netflix was the top performer in communication services, with its shares climbing 14% on the week as the streaming entertainment company reported Q4 earnings and revenue above expectations as it added 18.9 million subscribers worldwide, almost double market estimates. Netflix also issued above-consensus Q1 guidance.

In health care, shares of Moderna (MRNA) jumped 22% after the vaccine maker was awarded $590 million by the US Department of Health and Human Services for the development of mRNA-based influenza vaccines. Moderna also said it has been awarded a tender to supply its COVID-19 vaccine in the European Union, Norway and North Macedonia.

GE Aerospace shares led the industrials sector's gainers, rising 7.6% as the company reported Q4 adjusted earnings per share and revenue above analysts' mean estimates. The high end of the company's guidance range for 2025 adjusted EPS also surpassed analysts' mean estimate.

Energy was the lone decliner for the week, shedding 2.9% amid a drop in crude oil futures.

Shares of Halliburton (HAL) fell 7% as the company's Q4 adjusted earnings per share came in a penny above analysts' consensus estimate but its revenue slightly missed the Street view.

Next week's earnings calendar features AT&T (T), Boeing (BA), Starbucks (SBUX), Microsoft (MSFT), Meta Platforms (META), Tesla (TSLA), International Business Machines (IBM), Apple (AAPL), Visa (V), Mastercard (MA), Caterpillar (CAT), United Parcel Service (UPS), Exxon Mobil (XOM), AbbVie (ABBV) and Chevron (CVX).

Economic data will include December new and pending home sales, Q1 gross domestic product and the December personal consumption expenditures price index, among other reports. Also, the Federal Open Market Committee will hold its first meeting of 2025.

A Look Forward

The stock market is a discounting mechanism, meaning today’s stock prices reflect all available information, including present and potential future events. And for the most part, the markets reacted positively to the news coming out of Washington last week. Some news spurred broad-based market moves, while other news had more sector-specific impacts.⁶

For example, on Thursday, markets reacted positively to news that the White House believes interest rates were too high and want to see rates trend lower. The Fed’s first scheduled two-day policy meeting ends on Wednesday, so investors may be looking to see if Fed Chair Jerome Powell addresses the new administration's concerns.

This Week: Key Economic Data

Monday: New Home Sales.

Tuesday: Durable Goods. Consumer Confidence. Case-Shiller Home Price Index. Federal Open Market Committee (FOMC) meeting—Day 1.

Wednesday: FOMC meeting—Day 2. U.S. Trade Balance in Goods. Retail and Wholesale Inventories. FOMC announcement and Fed Chair Powell press conference.

Thursday: Gross Domestic Product (GDP). Pending Home Sales. Weekly Jobless Claims.

Friday: Personal Consumption & Expenditures (PCE) Index. Employment Cost Index. Fed Governor Michelle Bowman speaks.

^{Source: Investors Business Daily - Econoday economic calendar; January 24, 2025}^{The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: AT&T Inc. (T)

Tuesday: Starbucks Corporation (SBUX), The Boeing Company (BA), RTX Corporation (RTX), Stryker Corporation (SYK), Lockheed Martin Corporation (LMT), General Motors Company (GM)

Wednesday: Microsoft Corporation (MSFT), Meta Platforms, Inc. (META), Tesla, Inc. (TSLA), T-Mobile US, Inc. (TMUS), ServiceNow, Inc. (NOW), International Business Machines Corporation (IBM), Automatic Data Processing, Inc. (ADP)

Thursday: Apple Inc. (AAPL), Visa Inc. (V), Mastercard Incorporated (MA), Thermo Fisher Scientific Inc. (TMO), Caterpillar Inc. (CAT), Comcast Corporation (CMCSA), The Blackstone Group (BS), United Parcel Service, Inc. (UPS), Marsh & McLennan Companies, Inc. (MMC), Intel Corporation (INTC)

Friday: Exxon Mobil Corporation (XOM), AbbVie (ABBV), Chevron Corporation (CVX)

^{Source: Zacks, January 24, 2025.}^{Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“In a sense, one can never read the book that the author originally wrote, and one can never read the same book twice."

– Edmund Wilson

Electronic Filing Options for Military Families

The Internal Revenue Service (IRS) offers several online resources for military members and their families. Some of these resources include:

IRS Free File. This program offers online tax preparation, electronic filing, and direct deposit of refunds. There is no charge.
Members of the military and their families with incomes below $72,000 can choose from any of the Free File tax software companies the IRS has compiled.
Free File Fillable Forms are available for those with income above $72,000.
Free File can help taxpayers determine their earned income tax credit, child and dependent care credit, and Recovery Rebate Credit.
Miltax is another free tax resource available for the military community offered through the Department of Defense.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁷

Easy Herbs to Grow Inside

Even if you don’t have a green thumb, these herbs are easy to grow inside. Herbs add a little greenery to your home and are healthy and delicious. A win-win!

Here are some of the easiest herbs to grow inside:

Basil
Bay leaves
Chives
Mint
Oregano
Parsley
Rosemary
Thyme

When planning your indoor herb garden, you may need to separate the herbs into individual containers because each has different watering schedules and sunlight requirements. For example, thyme, rosemary, and oregano enjoy much less water than basil. Once you know a bit about the care of each herb, your garden will thank you.

Tip adapted from Gardeners.com⁸

Joe showed up at a business meeting fresh and alert, even though he had not slept a wink during any of the past four days. Why wasn’t he tired?

Last week’s riddle: You can make it and read about it today; many classes are taught in it, but it is not part of the future. What is it?Answer: History.

Molokini Crater

Maui County, Hawaii, United States

Footnotes and Sources

^{1. The Wall Street Journal, January 24, 2025}

^{2. Investing.com, January 24, 2025}

^{3. MarketWatch.com, January 21, 2025}

^{4. CNBC.com, January 22, 2025}

^{5. CNBC.com, January 24, 2025}

^{6. The Wall Street Journal, January 21, 2025}

^{7. IRS.gov, June 10, 2024}

^{8. Gardeners.com, October 3, 2024}

^{9. Provided by MT Newswires & YCharts.com, January 20 - 24, 2025}

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