What happened last week…
The Federal Open Market Committee kept interest rates unchanged at 4.25% to 4.50%, as expected, pausing a reduction in rates after three consecutive meetings of cuts. Federal Reserve Chairman Jerome Powell said, “With our policy stance 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.”
The White House confirmed there will be a 25% tariff on imports from Mexico and Canada, as well as a 10% tariff on imports from China, which may begin on February 4.
The GDP growth rate (first estimate) for Q4 2024 missed expectations (2.5%) as it decreased to 2.3% from the Q3 2024 rate of 3.1%, which was higher than the Q2 2024 rate of 3.0%. The Q1 2024 rate of 1.6% was the lowest growth since the Covid pandemic.
New home sales for December beat expectations (670,000) as it increased to 698,000 from the upwardly revised 674,000 (from 664,000). It is the highest reading since September.
According to FactSet, as of January 31, for Q4 2024, 36% of S&P 500 companies have reported earnings with 77% having a positive EPS surprise and 63% having a positive revenue surprise.
Happening this week…
The following companies report earnings this week: PLTR, CMG, GOOG, MRK, PEP, ITW, UBER, AMZN, LLY.
On Monday, the manufacturing PMI for January is expected to increase to 49.5 from 49.3, which was the highest reading since March 2024 but the ninth straight contractionary reading (below 50) and the 25th contraction in the past 26 months. On Wednesday, the non-manufacturing PMI for January is expected to increase to 54.3 from 54.1, which was the sixth straight month of expansion. The figure has expanded in 52 of the previous 55 months.
On Wednesday, the ADP employment change may increase to 150,000 from 122,000. On Friday, the unemployment rate is expected to remain at 4.1%, nonfarm payrolls are forecasted to decrease to 170,000 from 256,000, and average hourly earnings month-over-month are expected to remain at 0.3%.
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- The Rockline Team
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