What happened last week…
In the week where President Donald Trump paused the 25% tariffs on both Mexico and Canada for one month and more earnings reports were announced, the three major indices finished lower with weekly performances as follows: DJIA (-0.54%), S&P 500 (-0.24%), NASDAQ (-0.53%). Each index remains positive year-to-date: DJIA (4.13%), S&P 500 (2.45%), NASDAQ (1.10%).
TheADP employment changebeat expectations (150,000) as it increased to 183,000 from the upwardly revised 176,000 (from 122,000). Theunemployment ratebeat expectations (4.1%) as it decreased to 4.0% from 4.1%.Nonfarm payrollsmissed expectations (169,000) as it decreased to 143,000 from the upwardly revised 307,000 (from 256,000).Average hourly earningsmonth-over-month beat expectations (0.3%) as it increased to 0.5% from 0.3%.
Themanufacturing PMIfor January beat expectations (49.8) as it increased to 50.9 from the downwardly revised 49.2 (from 49.3), making it the first expansionary reading after 26 consecutive months in contraction (below 50). Thenon-manufacturing PMIfor January missed expectations (54.3) as it decreased to 52.8 from the downwardly revised 54.0 (from 54.1). It marks the seventh straight month of expansion. The figure has expanded in 53 of the previous 56 months.
According to FactSet, as of February 7, for Q4 2024, 62% of S&P 500 companies have reported earnings with 77% having a positive EPS surprise and 63% having a positive revenue surprise. Theblendedearnings growthfor the S&P 500 is 16.4%, which would be the highest growth for the index since Q4 2021. Theblended revenuegrowthfor the index is 5.2%, which would be the 17th straight quarter of growth.
Happening this week…
On Wednesday, theinflation rateyear-over-year for January is expected to remain at 2.9%, which marked three consecutive months of increases. The rate peaked at 9.1% in June 2022. Thecore inflation rateyear-over-year for January is expected to decrease to 3.1% from 3.2%, which was the first month-over-month decline since July.
Thanks for Reading
-The Rockline Team
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