What happened last week…
The three major indices rebounded with weekly gains: DJIA (0.55%), S&P 500 (1.47%), NASDAQ (2.58%). During the week, President Donald Trump signed a memorandum forreciprocal tariffs, which will not go into effect immediately, on countries that put a higher tariff on American goods. The framework of such tariffs are expected to be determined by April 1.
In his semiannual testimony to Congress, Federal Reserve ChairmanJerome Powellremarked, “With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. We know that reducing policy restraint too fast or too much could hinder progress on inflation. At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment.” The current interest rate is set at a range of 4.25% to 4.50%. Powell also mentioned that the central bank will not create its own digital currency while he is chairman. His terms ends May 2026.
Theinflation rateyear-over-year for January landed higher than expectations (2.9%) as it increased to 3.0% from 2.9%, marking four consecutive months of increases and the highest reading since June 2024 (3.0%). The rate peaked at 9.1% in June 2022. Thecore inflation rateyear-over-year for January also landed higher than expectations (3.1%) as it increased to 3.3% from 3.2%.
According to FactSet, as of February 14, for Q4 2024, 77% of S&P 500 companies have reported earnings with 76% having a positive EPS surprise and 62% having a positive revenue surprise. Theblendedearnings growthfor the S&P 500 is 16.9%, 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…
The following companies report earnings this week: GPC, SO, WMT.
On Friday,existing home salesfor January are expected to decrease to 4.17 million from 4.24 million, which was the highest reading since February 2024 (4.38 million).
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-The Rockline Team
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