1/27/25 Weekly Market Commentary

What happened last week…

President Donald Trump announced Stargate, an artificial intelligence joint venture between OpenAI, Oracle (ORCL), and SoftBank that could see the investment worth up to $500 billion over the next four years. The initial investment is expected to be $100 billion. Trump also said he would approve the expedited construction of power plants for AI via an emergency declaration. Under the Stargate venture, data centers will be constructed in Texas, which is already underway.?

Existing home sales for December beat expectations (4.19 million) as it increased to 4.24 million from 4.15 million. It is the highest reading since February 2024 (4.38 million).

According to FactSet, as of January 24, for Q4 2024, 16% of S&P 500 companies have reported earnings with 80% having a positive EPS surprise and 62% having a positive revenue surprise. The blended?earnings growth for the S&P 500 is 12.7%, which would be the highest growth for the index since Q4 2021. The blended revenue?growth for the index is 4.6%, which would be the 17th straight quarter of growth. In the Rockline portfolios, 15% of companies have reported earnings with 89% having a positive EPS surprise and 78% having a positive revenue surprise.

Happening this week…

On Monday, new home sales for December are expected to increase to 670,000 from 664,000, which was the second-lowest reading since March 2024.?

On Wednesday, the Federal Open Market Committee will make its first interest rate decision of the year. According to the CME FedWatch Tool, as of January 24, there is a 99.5% probability that interest rates will remain at 4.25% to 4.50%.?

On Thursday, the GDP growth rate (first estimate) for Q4 2024 is expected to decrease to 2.7% from 3.1%, which was higher than the Q2 2024 rate of 3.0%. It is the best quarterly reading of the year thus far. The Q1 2024 rate of 1.6% was the lowest growth since the Covid pandemic.?

Thanks for Reading!

- The Rockline Team

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