A Turning Point for the S&P 500: Signs of a New Chapter

The next four years could redefine the narrative from his first term

Jan 21, 2025

Market Overview

The S&P 500 surged 2.91% last week, marking its best performance since November 2024. This sharp rebound followed a fragile period dominated by fears of a potential market breakdown. Optimism returned quickly, buoyed by a mix of economic data, policy shifts, and cultural buzz, just as Donald Trump’s inauguration neared.

The S&P 500 now sits above its all-time high anchored VWAP, a technical milestone suggesting renewed strength. Several key factors drove the rally:

Dovish Fed Signals: Federal Reserve Governor Christopher Waller surprised markets with hints at the possibility of up to four rate cuts this year, sparking hopes of looser monetary policy.
Cooling Inflation: Both the Producer Price Index (PPI) and Consumer Price Index (CPI) came in below expectations, fueling speculation that inflationary pressures may finally be “easing”.
Cultural Buzz: The launch of Trump Family Coins has captivated public attention, evoking comparisons to past speculative frenzies, such as the stock and crypto booms of 2021.

For now, Mr. Market seems to be in a wait-and-see mode, with Netflix set to kick off the tech earnings season this Tuesday. While a clear directional trend has yet to emerge. However, one thing is certain: entertainment is guaranteed.

Bank of Japan Poised To Raise Rates to Highest in 17 Years

A significant yet somewhat underreported story is the Bank of Japan’s upcoming rate decision, scheduled for this week. Last July, the BOJ’s meeting was accompanied by a series of well-telegraphed actions, leading to minimal market volatility initially. However, subsequent surprises caught markets off guard, triggering dramatic reactions.

While it’s uncertain whether a similar scenario will unfold this time, the atmosphere feels reminiscent of last summer. Now that the transfer of power in the U.S. is settled, the BOJ’s policy moves may once again become a focal point, potentially driving more market volatility.

Earnings Next Week

For the week of Jan 20, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-01-20: AM AVAL 0.00%↑
2025-01-21: PM NFLX 0.00%↑ COF 0.00%↑ UAL 0.00%↑ IBKR 0.00%↑ STX 0.00%↑
2025-01-21: AM HDB 0.00%↑ SCHW 0.00%↑ PLD 0.00%↑ MMM 0.00%↑ DHI 0.00%↑
2025-01-22: PM NOW 0.00%↑ KMI 0.00%↑ DFS 0.00%↑ STLD 0.00%↑ AA 0.00%↑
2025-01-22: AM PG 0.00%↑ JNJ 0.00%↑ ABT 0.00%↑ PGR 0.00%↑ GEV 0.00%↑
2025-01-23: PM TXN 0.00%↑ CSX 0.00%↑ EWBC 0.00%↑ SSB 0.00%↑ COLB 0.00%↑
2025-01-23: AM GE 0.00%↑ UNP 0.00%↑ INTC 0.00%↑ ELV 0.00%↑ FCX 0.00%↑
2025-01-24: AM AXP 0.00%↑ VZ 0.00%↑ NEE 0.00%↑ HCA 0.00%↑ UBSI 0.00%↑

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