2/10/25 Weekly Market Commentary

What happened last week…?????????

In the week where President Donald Trump paused the 25% tariffs on both Mexico and Canada for one month and more earnings reports were announced, the three major indices finished lower with weekly performances as follows: DJIA (-0.54%), S&P 500 (-0.24%), NASDAQ (-0.53%). Each index remains positive year-to-date: DJIA (4.13%), S&P 500 (2.45%), NASDAQ (1.10%).

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The ADP employment change beat expectations (150,000) as it increased to 183,000 from the upwardly revised 176,000 (from 122,000). The unemployment rate beat expectations (4.1%) as it decreased to 4.0% from 4.1%. Nonfarm payrolls missed expectations (169,000) as it decreased to 143,000 from the upwardly revised 307,000 (from 256,000). Average hourly earnings month-over-month beat expectations (0.3%) as it increased to 0.5% from 0.3%.

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The manufacturing PMI for January beat expectations (49.8) as it increased to 50.9 from the downwardly revised 49.2 (from 49.3), making it the first expansionary reading after 26 consecutive months in contraction (below 50). The non-manufacturing PMI for January missed expectations (54.3) as it decreased to 52.8 from the downwardly revised 54.0 (from 54.1). It marks the seventh straight month of expansion. The figure has expanded in 53 of the previous 56 months.

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According to FactSet, as of February 7, for Q4 2024, 62% of S&P 500 companies have reported earnings with 77% having a positive EPS surprise and 63% having a positive revenue surprise. The blended earnings growth for the S&P 500 is 16.4%, which would be the highest growth for the index since Q4 2021. The blended revenue growth for the index is 5.2%, which would be the 17th straight quarter of growth.

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Happening this week…

On Wednesday, the inflation rate year-over-year for January is expected to remain at 2.9%, which marked three consecutive months of increases. The rate peaked at 9.1% in June 2022. The core inflation rate year-over-year for January is expected to decrease to 3.1% from 3.2%, which was the first month-over-month decline since July.

Thanks for Reading

-The Rockline Team

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