T&G Weekly Outlook: Markets Make Way for Trump’s Inauguration—Netflix & Co. Take the Earnings Stage 🍿🤝
Wall Street braces for policy fireworks as we watch Netflix’s numbers and tally our rate-cut bets.
Curtain Call for the Biden Era, Cue Trump 🏛️
A sizzling stock rally greeted investors last week, just in time for President-elect Donald Trump to retake the White House on Monday. Yes, the markets are closed for MLK Day, but headlines are guaranteed to be anything but sleepy:
S&P 500 (^GSPC) nailed down a 3% weekly surge, its best since Election Day.
Nasdaq (^IXIC) popped a solid 2.6%, while the Dow (^DJI) soared nearly 4%.
Now, we brace for The Donald’s second inauguration. Investors remain laser-focused on his rumored tariff tinkering and potential tax overhauls. Could he revive the “Trump Trade,” or is the White House about to launch a monetary circus? 🎪
BofA strategist Michael Hartnett thinks Trump may “protect” the S&P 500 if the market stumbles. After all, Trump’s always been a fan of a roaring stock market—an ego metric if ever there was one. But watch out: Rates might bounce again if inflation fears re-ignite.
Fed Debate Enters ‘Blackout’ 🤐
Last week’s data spree saw softer-than-expected inflation and a cooler labor market freakout than we feared. Now, the Fed enters a quiet zone before its next big meeting on Jan. 29.
Hotter jobs days ago threatened to spark fresh rate-hike talk.
Softer inflation quickly smothered that.
Result: The market’s torn between one or two Fed rate cuts this year (depending on your friendly neighborhood economist). For a moment, folks even whispered about more hikes—but that’s in the distant memory pile if inflation doesn’t stir. 🙏
The Earnings Parade Rolls On 💼
With big banks mostly out of the gate, we brace for 43 S&P 500 companies’ reports. The star on the marquee? Netflix (NFLX). Tech watchers, get your popcorn: Are we still in the streaming wars, or has Netflix fully conquered the living room?
Other notable releases:
United Airlines (UAL): We’ll see if business travel is back, or if Zoom’s still pinching them.
Johnson & Johnson (JNJ): A bellwether for healthcare stability, especially if Trump’s prescription for drug prices ruffles feathers.
3M (MMM): We want to see if industrials keep riding that cyclical upswing.
Citi and others predict a strong quarter overall. But will the Trump swirl overshadow these results? S&P 500 earnings growth is pacing around 12.5% year over year—quite the comeback story. 🎉
The Week’s Calendar: Events & Data 🗓️
Monday, Jan. 20
Markets Closed for MLK Day.
Trump’s Inauguration: The second time around. Make sure your Twitter notifications are on, folks.
Tuesday, Jan. 21
Economic Data: Crickets. No major releases.
Earnings:
Netflix (NFLX)
3M Company (MMM)
Capital One (COF)
Charles Schwab (SCHW)
D.R. Horton (DHI)
KeyCorp (KEY)
Interactive Brokers (IBKR)
United Airlines (UAL)
Zions Bancorp (ZION)
Wednesday, Jan. 22
Economic Data:
MBA Mortgage Applications (previous +33.3%)
Leading Index (Dec) (-0.1% expected, +0.3% prior)
Earnings:
Alcoa (AA)
Abbott Labs (ABT)
Ally Financial (ALLY)
Comerica (CMA)
Discover Financial (DFS)
GE Vernova (GEV)
Johnson & Johnson (JNJ)
Halliburton (HAL)
Procter & Gamble (PG)
Steel Dynamics (STLD)
Travelers (TRV)
Thursday, Jan. 23
Economic Data:
Initial Jobless Claims (prior 217k)
Kansas City Fed Manufacturing (Jan) (-4 prior)
Earnings:
American Airlines (AAL)
Alaska Airlines (ALK)
CSX Corporation (CSX)
Freeport-McMoRan (FCX)
GE Aerospace (GE)
Intuitive Surgical (ISRG)
Texas Instruments (TXN)
Union Pacific (UNP)
Friday, Jan. 24
Economic Data:
S&P Global US Manufacturing PMI (Jan prelim) (49.4 prior)
S&P Global Services PMI (Jan prelim) (56.8 prior)
S&P Global US Composite PMI (55.4 prior)
University of Michigan Consumer Sentiment (Jan final) (73.2 prior)
Existing Home Sales (Dec) (1.2% expected, 4.8% prior)
Earnings:
American Express (AXP)
First Citizens (FCNCA)
NextEra Energy (NEE)
Verizon (VZ)
Be On the Lookout 👀
1) Policy Bombshells
Trump’s Day One (and week one, month one...) may bring big executive orders on immigration, tariffs, spending, and more. We’ll see if that translates to another fade or surge in the 10-year yield, which sank back to around 4.6%. Low yields, good news for stocks. 🌈
Netflix’s Performance
No bigger name to test the streaming champ’s post-pandemic mojo. Subscriber addition? Check. Big new shows? Check. Competition? They’re now under every rock. Keep an eye on forward guidance: CFO might talk about ad tier traction, which could spark the next wave of Netflix mania.
Household Spending
Retail sales did look decent last week, but consumer sentiment is next. Will Americans stop buying if their monthly inflation concerns remain shaky? A big fear is that fresh tariffs or hawkish stances on foreign trade could reroute supply chains and goose prices, souring consumer confidence.
Bottom Line: Inaugural Optimism or Reality Check? 🎆
Stocks soared, inflation cooled, and the Fed might cut rates after all. All this, right before a new administration that vows to “save the economy from overspending” while promoting tariffs to “fix trade.” Could that be contradictory? Possibly. But markets, for now, see a glass half-full 🍹.
Earnings season roars on, but the real fireworks may be in Washington. Buckle up, folks—a new year, a new presidency, and a market eager for the next catalyst. Enjoy the show! 🎉