Market Drama
Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA
January 20th, 2025
Watch Time: 4.1 minutes
Welcome to this week’s Market Drama!
Stock Market Update:
- S&P 500: Up 3.7% for the week and 2.2% year-to-date. Earnings are expected to rise 11% in Q4, marking the strongest growth in over three years.
- Nasdaq: Up 2.4% for the week and 1.7% year-to-date.
- Value Stocks Outperformed Growth Stocks due to:
- Rising energy prices boosting energy stocks (mostly value stocks).
- A strong start to the financial sector’s earnings season.
- Stabilizing bond yields, although the 10-year Treasury yield spiked over 60 basis points since December, raising concerns about inflation and the Fed potentially pausing or slowing rate cuts.
If bond yields stabilize and decline slightly, supported by inflation data pointing downward, equities can refocus on earnings. For now, the market seesaws between macro concerns—how rapidly yields are rising and their signal to the Fed—and the stronger earnings story that could dominate if stability returns.
- Core CPI: Dropped to 3.2% from 3.3%, the first decline since July last year.
- Shelter Inflation: Fell to 4.6% year-over-year, the lowest since 2022.
Stay tuned for next week.
– Andres
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