MARKET WRAP

The SPX rose by 1%, closing out a roughly +3% week and erasing last week’s sell-off. The SPX 6000 level played a significant role over the past 30+ days and was notably influential for today’s expiration, helping stocks drift higher. (details at the end of the email). The QQQs gained 1.7%, while IWM lagged slightly behind other indices(+0.4%) and closed near $225, a significant level for IWM for a few years. Treasury yields were mixed to flat. Oil declined again, providing some support for equities, and seems to be at least pausing its upward trend since late December. Markets will be closed Monday for MLK Day. A preview of next week will be sent Monday evening.

MRKT MATRIX: January 17, 2025

Today’s Top Stories:

• Dow rises more than 300 points, S&P 500 heads for best week since November as rates fall (CNBC)

• S&P 500 should reach 6,600 this year on easing inflation backdrop, says UBS (CNBC)

• S&P 500 Earnings Season Update: January 17, 2025 (FactSet)

• Analysts are increasing their earnings estimates on these names set to report next week (CNBC)

• Traders Say Ignore the Daily Trump Noise, Focus on the Long Term (Bloomberg)

• Intel Shares Jump on Report It’s an Acquisition Target (Bloomberg)

• Cantor Fitzgerald says Microsoft is a buy, cites artificial intelligence opportunities (CNBC)

• Ozempic Among the Next Drugs Up for Medicare Price Negotiations (WSJ)

• Supreme Court upholds TikTok ban, but Trump might offer lifeline (CNBC)

• Israel Security Cabinet Approves Deal For Ceasefire in Gaza (Bloomberg)

Today’s On The Tape is Presented by CME Group, iConnections, and Robinhood

Oh The Humanity: Bonds, Bitcoin & Bye Bye Hindenburg

Guy Adami and Danny Moses explore the performance of the S&P 500 post-election. The duo analyze the implications of tax cuts, tariff scares, and bond yields, with Guy predicting ten-year yields will reach 5% by the Super Bowl. The conversation evaluates the impact of Federal Reserve policies, bond market activities, and Jerome Powell's tenure on financial markets. Danny delves into the challenges faced by the bond market since 2007-08 and the fine line between economic growth and higher interest rates. Shifting gears, they discuss the valuations of major banks and the disparity in market perceptions of JPMorgan and Citibank. The episode also examines the performance of luxury brands like Richemont amidst stark economic realities, and wraps up with insights on gold, Bitcoin, and the potential market implications of Hindenburg Research's closure. The hosts then preview upcoming football games, providing their thoughts and predictions for the weekend's matchups.

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What’s Next?

As mentioned, today was expiration Friday, with a significant volume of options expiring at the SPX 6000 level. The market closed precisely at that level, as the expiring options acted like a magnet and helping the rally today. With those options now expired, the backdrop shifts heading into next week. (See yesterday’s email for more).

The VIX closed below 16 ahead of the three-day weekend—significantly lower than earlier this week but far from signaling an easy to call "low-volatility grind" higher for stocks. Large day-to-day moves remain possible, especially with mega-cap tech earnings on the horizon. After this rally, the market has some breathing room to determine its next move. That said, today’s expiration relieves a lot of overhead supply (from expiring options) and makes it easier for the market to push toward new highs should it choose. Treasuries and earnings season will be key drivers of the next market move.

Next week’s earnings calendar includes reports from NFLX, PG, ABT, UAL, GE, AAL, TXN, AXP, and others. On the economic front, it’s a fairly quiet week domestically, with initial jobless claims and global PMIs headlining. However, economic headlines from Japan and Europe could provide additional catalysts.

We’ll send a full preview Monday evening—check your inbox!

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