Into Earnings Season – Monday Morning Market Memo – January 15, 2024

Into Earnings Season – Monday Morning Market Memo – January 15, 2024

Just a reminder that the financial markets, and our offices, are closed today in observation of Martin Luther King Jr. Day.  We will keep this memo on the shorter side as we hope you are enjoying the long holiday weekend!

We know we say it often, and you may be tired of hearing it – but earnings are the mother’s milk of stock prices and earnings season is our favorite season, especially when the extended forecasts are bright.

Several big banks kicked things off last Friday, with Bank of AmericaWells Fargo, JPMorgan Chase, and Citigroup all reporting.  As a group, the banks generally beat on the top line, but other numbers within the reports were mixed, and collectively they traded down on the day.  The pace of earnings releases picks up this week, with financials remaining in focus, as Goldman SachsMorgan StanleyPNC Financial ServicesCharles Schwab, U.S. Bancorp, and Discover Financial Services are all scheduled to report.

Looking at how stocks performed overall last week – The Dow Jones Industrial Average rose .34% to 37,593 – the NASDAQ Composite jumped 3.09% to 14,973 – the Standard & Poor’s 500 Index gained 1.84% to 4,784 (right near its record high).

Inflation data released last week was contradictory.  Markets digested higher-than-expected Consumer Price Index data on Thursday, with the CPI rising 3.4% year-over-year, versus expectations for a 3.2% increase.  This report seemingly made interest rate cuts by the Federal Reserve less likely.  Producer Price Index data released the following morning however, showed wholesale prices unexpectedly declined last month.  Put it all together, and there is a 79% probability the Federal Reserve will cut interest rates at their March meeting, according to the CME FedWatch Tool.

With earnings reports and a January Fed meeting in the spotlight for the rest of this month – we expect market action/volatility to increase – and we’ll be watching the forecasts!


All the best – Southport Station Financial Management, LLC