MARKET WRAP

SPX gave back slightly (-0.3%) following a new closing high yesterday but was up roughly 1.5% for the week. QQQ was -0.6% today. IWM -0.3%. Treasury Yields declined slightly across the curve. VIX dropped further into the weekend, now at 14.85, but it could pick up into Wednesday (more below). Some notable gainers today included DIS, UAL, VZ (earnings) and AVGO. Decliners included TXN (earns): AXP (earns), NVDA, and ISRG (earns). Friday’s SPX close near 6100 was likely influenced by options expiration, as large round number strikes often act as magnets—especially on Fridays. Below, Dan and Guy look ahead to next week’s packed earnings calendar on today’s MRKT Call while On The Tape welcomes Mike Wilson with his 2025 Market Outlook.

MRKT MATRIX: January 24, 2025

Today’s Top Stories:

• Stocks fall as rally pauses, but S&P 500 heads for weekly gain (CNBC)

• Trump Would ‘Rather Not’ Put Tariffs on China, Maintains Threat (Bloomberg)

• Wall Street Enters Darker Age With Most Stock Trading Now Hidden (Bloomberg)

• Japan Hikes Rates, Solidifying Exit From Rock-Bottom Borrowing Costs (Bloomberg)

• The new AI rally is leaving Apple behind, at least for now (CNBC)

• Meta to begin testing ads on Threads, its micro-blogging app (CNBC)

• Bernstein upgrades Netflix after blowout earnings, sees more than 20% upside ahead (CNBC)

• S&P 500 Earnings Season Update: January 24, 2025 (FactSet)

• How United and Delta Are Disproving Buffett’s ‘Bottomless Pit’ Theory (WSJ)

• Oracle, Apple, Google Diverge on Whether to Keep Serving TikTok (Bloomberg)

Today’s MRKT Call is Presented by Robinhood

Stocks At Records Ahead of Busiest Week for Earnings

Dan and Guy preview next week’s mega cap earnings as well as discuss ORCL’s recent move. Dan posts a potential way to fade that move via a put calendar. Then a look at GM into earnings and a potential trade that positions for the stock to go sideways or higher next week. Finally, a check in on TXN after today’s earnings decline.

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

Mike Wilson’s 2025 Outlook: Valuations, Inflation & The AI Economy

Dan Nathan and Guy Adami welcome back Mike Wilson, Chief Investment Officer and Head of U.S. Equity Strategy at Morgan Stanley. Mike reflects on his previous bullish pivot due to improved liquidity and the unexpected resilience of the market. They discuss the importance of earnings forecasts, the impact of liquidity on high-quality stocks, and potential shifts in international flows. The conversation turns to the passive investing trend, potential economic factors affecting interest rates, and the influence of international monetary policies, such as the BOJ's rate decisions. Key topics include the role of earnings revisions, currency impacts on multinationals, and how various sectors might react to the evolving economic landscape. The podcast delves into market valuations, the potential of AI, CapEx cycles, and the broader implications of liquidity. They conclude by discussing investor sentiment, the resilience of high-quality stocks, and the broader economic outlook heading into the first half of the year.

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What’s Next?

We’ll be back this Sunday with a preview of next week’s major events, which include:

• Earnings Reports: MSFT, META, TSLA, IBM, AAPL, INTC and more.

• FOMC Meeting: The last Federal Reserve meeting until March.

Next week is widely seen as potentially decisive for the market’s next move, especially with the SPX sitting at all-time highs.

Recent Historical Context: Mega Cap Tech Earnings and Subsequent Market Moves

Using AAPL’s earnings as a historical marker of the heart of earnings season, we can take a look at how the market fared coming out of that part of earnings season:

• October 31st, 2024:

  • SPX fell -2.5% in the days following.

  • The market then rallied +5% the following week (after the election.)

• August 1st, 2024:

  • SPX dropped -5% the week after earnings.

  • This was followed by a sharp +9% bounce over the next two weeks.

• May 2nd, 2024:

  • SPX gained +5% over the two weeks following.

• February 1st, 2024:

  • Post-earnings action was more subdued, with SPX continuing a grind higher that lasted through March.

  • However, that rally was significant, as tech stocks helped power SPX above 5000 with little resistance.
    
    

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