By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- All eyes will be on the U.S. Federal Reserve (Fed) this week as it meets for the first time in 2025. After cutting rates at the last three meetings of 2024 (a total of 100 basis points), policymakers are widely expected to leave rates unchanged. Futures are currently pricing for no change this week and a total of two interest rate cuts in calendar-year 2025. The data has continued to point toward economic growth, and fears remain that inflation will trend sideways to higher, leaving the Fed in wait-and-see mode.
- The other big story will be earnings. Less than 20% of the S&P 500 members have reported fourth-quarter earnings but a large number are scheduled this week, including four members of the “Magnificent 7” (Meta, Tesla, Apple and Microsoft). Almost 80% of the companies that have reported have had positive earnings surprises with an aggregate surprise of 7.9%, led by financials and materials.
- And finally, the Fed’s favored inflation measure, core personal consumption expenditures, will be released on Friday. It is expected up 2.8% on a year-over-year basis and still above the Fed’s target. Other releases include consumer confidence, durable goods and new home sales.
Three Things to Know
- According to a Redfin survey, 34% of Americans now say they will never sell a home that they own, and 27% believe they will not sell their home within the next 10 years. Furthermore, 43% of Baby Boomers claim they will never sell their home, the highest share among all generations. At the same time, more than a third of Gen X and 28% of Millennial/Gen Z owners think the same. (Source: The Kobeissi Letter)
- The wingspan of a Boeing 747 is longer than the total distance of the Wright Brothers’ first flight. (Source: Planesanity)
- Nintendo, the Japanese gaming company associated with video game legends such as Mario, Donkey Kong, Zelda and the Pokémon characters is actually much older than the video game era. Nintendo originally made playing cards called hanafuda, and the company was founded way back in 1889, when the infamous Jack the Ripper was creating havoc on the streets of London. (Source: Boredpanda)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.