Morning Commentary
The market closed in the green by the slimmest of margins yesterday, yet it was truly an impressive session. The S&P 500 climbed out of the hole twice as investors grappled with the question of inflation.
The rotation trade was in play as buyers sought opportunities in cyclical sectors rather than sell growth and flee to the sidelines.
Industrial Strength
Industrial (XLI) names made up half of the top ten advancers reflecting the dealmaking and the consumption ‘boom’ that comes with reshoring, data center building, and focus on rebuilding the domestic economy.
The Industrial Sector has been in a steady uptrend but recently failed to exceed the 50-day moving average. However, the rate of change (ROC) and the relative strength index (RSI) are turning higher.
For the record, the jump in bond yields reflects many things, including Jay Powell and Co. losing the thread. I do not believe there will be a spike in the inflation rate, but it’s a perfect storm for wealthy households to keep spending lavishly and everyone else trying to keep up. It's the American way.
This morning, we will receive the Consumer Price Index (CPI) report. It's critically important that it is in line with or better than the consensus.
Tense up, folks, it's earnings season.
Banks in the Batter’s Box
Wall Street is banking big time on big banks coming through.
Nothing To Fear
In addition to the ten-year bond yield, we are watching the Volatility Index (VIX), which has trended higher this year, hitting 22.0 on Monday.
Today’s Session
The Consumer Price Index for December was in line with consensus, and the market breathed a sigh of relief.
Need to Let More Air Out
The weight of inflation is still a powerful force, harming most American households. It's edging higher, but the news eases concerns that the conversation may be on how many rate hikes were coming instead of rate cuts.
It also has to be noted that the CPI came in at 0.4 % on a month-to-month basis and has excelled in back-to-back months.
On a yearly basis, core CPI was up 3.2% against a consensus of 3.3% and on a monthly basis went up 0.2% against consensus of 0.3%. That’s nudging bond yields lower and equities higher.
Banks Beat Big Time
The banks crushed it!
We will have greater detail in the afternoon note, but here is a quick score sheet.
Banks Big Bang |
Revenue |
Earnings |
Guidance |
GS |
Beat |
Beat |
Higher
|
JPM |
Beat |
Beat |
Higher
|
C |
Beat |
Beat |
Higher
|
WFC |
Miss
|
Beat |
Higher |
The market loves it and bids these names much higher ahead of the open.
Comments |
Yes. Definitely. I think it will be difficult and may take much longer than we would like because of the terrible job of this current administration and the democrats wanting Trump and the Republicans to fail, but I still think things will get much better. Tom Hart on 1/15/2025 4:53:12 PM |
The best change this country we'll ever see next to 1776. Cj on 1/16/2025 9:15:23 AM |
6 years ago I saw the clinical symptoms and signs of dementia of the Alzheimer's type and Joe Biden. Joe Biden has destroyed the United States of America. The goal to succeed in in the USA is hard work and sacrifices. Joe Biden has Alzheimer's disease of the Alzheimer's type with secondary parkinsonism. Donald Trump is a hard-working man. Donald Trump makes me feel that he and I are the same level. To succeed in life needs hard work.For Americans to succeed we need hard work and sacrifices. BRIDGLAL RAMKISSOON on 1/16/2025 4:07:47 PM |
Charles, yes, healing and prosperity provided a very united Congress and Senate behind Trump. That has not always been a GOP strength. I am cautiously optimistic and very hopeful about this "idea." John H Rooney on 1/17/2025 8:18:32 AM |
Yes, the inauguration will start the process for healing and greater prosperity. However, the swamp is deep. I have many liberal friends who cannot understand how Donald Trump was reelected to the presidency and believe he is a big crook and they will do anything to hinder the healing process. It is sad to see the current administration try and sabotage everything they can as they exit their positions of power. Jim Joyce on 1/19/2025 4:43:26 PM |
I think at first emotionally with all his actions yes; ultimately need to bring down inflation. Therese Jeffrey on 1/28/2025 10:55:17 AM |
I believe a new administration can renew prosperity, especially with it's new rules to engage the press. The media has lost it's way, forgot to seek truth, and breeds racism. It will never be perfect. I do feel a easing personally. I pray for our country & leaders. Reno Diggs on 1/31/2025 8:17:30 AM |
Yes, I really feel good about the future economy and healing with the emphasis on Common Sense. Common sense must be a winning outlook. Bernard Lambert on 2/2/2025 12:46:32 PM |
Tweet |
2/14/2025 1:40 PM | Exhibiting Mixed Action |
2/14/2025 9:51 AM | MAKE LOVE, NOT WAR |
2/13/2025 1:35 PM | Bouncing Back |
2/13/2025 9:54 AM | Feast or Famine Setting In |
2/12/2025 12:59 PM | CPI Reaction Overdone |
2/12/2025 9:54 AM | MARKET RESOLVE |
2/11/2025 1:05 PM | Powell Testimony in Focus |
2/11/2025 9:40 AM | MOMENTUM RULES |
2/10/2025 1:18 PM | Tech Stocks Rebound |
2/10/2025 9:54 AM | INFLATED INFLATION FEARS |
2/7/2025 1:15 PM | Inflation Uncertainty |
2/7/2025 9:41 AM | BIG REMAINS BEAUTIFUL |
2/6/2025 1:00 PM | Quiet Day |
2/6/2025 9:43 AM | BOND DIGGING DOGE |
2/5/2025 1:28 PM | Recovering |
2/5/2025 9:29 AM | RETAIL RIDES THE WAVE AND WALL STREET FROWNS |
2/4/2025 1:03 PM | Financial Media in Overtime |
2/4/2025 9:52 AM | FRIENDS MAKING NICE |
2/3/2025 1:42 PM | Market Reacting to Tariff Headlines |
2/3/2025 9:37 AM | TARIFFS ARE HERE |
1/31/2025 1:33 PM | Mag Seven is Back |
1/31/2025 9:00 AM | WINTER IS HERE |
1/30/2025 1:33 PM | Bumpy Day |
1/30/2025 9:47 AM | POWELL WALKS THIN LINE |
1/29/2025 1:24 PM | Watching for Big Tech Earnings |
More commentary archives |
Home |
Products & Services |
Education |
In The Media |
Help |
About Us |
Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.
|