Three Things to Know & Watch

Feb 3, 2025

By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch

  • The employment situation will be front and center this week. On Tuesday the Job Openings and Labor Turnover Survey (JOLTS) data for December will be released, and then on Friday, the January employment report. Nonfarm payrolls are expected to increase 170,000, and the unemployment report to remain steady at 4.1%. Those numbers would likely do little to change the outlook for monetary policy in either direction.
  • In other data releases, the markets will see the University of Michigan’s preliminary consumer sentiment reading on Friday and both Institute for Supply Management (ISM) reports (manufacturing and services) on Monday and Wednesday, respectively. The ISM manufacturing survey is expected at 49.9, which would be the best reading since October 2022. New orders have rebounded strongly the past two months with that trend expected to continue.
  • The earnings parade will continue with high-profile names Walt Disney, Alphabet and Qualcomm among others to report. To date, 78% of S&P 500 members reporting earnings are posting positive surprises.

Three Things to Know

  • Since the start of 2024, the only net buyers of U.S. equities are indexes and ETFs. Everyone else (institutions, retail, hedge funds) is a seller. (Source: Tim Quast, S&P Global)
  • New tariffs of 25% on Mexico, 25% on Canada and 10% on China are now live. Mexico and Canada’s exports to the United States account for approximately 78% and 77% of their total annual exports, respectively. U.S. exports to Mexico and Canada account for approximately 16% and 17% of total U.S. annual exports, respectively. U.S. exports to Mexico and Canada are ~$320 billion and ~$360 billion, respectively, which is less than 2.5% of U.S. GDP. On the other hand, these exports represent 20%–30% of Canada’s and Mexico’s GDP. Source: The Kobeissi Letter)
  • Walgreens announced this week that it would stop paying its dividend for the first time since 1933 in a bid to conserve cash and save the business. (Source @StockMKTNewz)

 

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.