This week is shaping up to be a busy one for investors, with the Federal Reserve’s interest rate decision and remarks from Chair Jerome Powell taking center stage on Wednesday. The Fed meeting will be closely watched for clues about future rate policy, particularly as a new presidential administration begins. Investors will also receive crucial updates on U.S. economic performance, including fourth-quarter GDP and December’s Personal Consumption Expenditures (PCE) inflation data.
Earnings season will bring a slew of updates from major companies, including members of the “Magnificent 7,” such as Microsoft (MSFT), Meta Platforms (META), Tesla (TSLA), and Apple (AAPL). Additional reports are expected from AT&T (T), Intel (INTC), Caterpillar (CAT), Comcast (CMCSA), Visa (V), and ExxonMobil (XOM).
Economic Data Highlights
Monday, Jan. 27
- New home sales (December).
- Earnings reports: AT&T, Brown & Brown (BRO), and SoFi (SOFI).
Tuesday, Jan. 28
- FHFA Home Price Index (November).
- S&P Case-Shiller Home Price Index (November).
- Consumer Confidence (January).
- Durable Goods Orders (November).
- Federal Open Market Committee (FOMC) meeting begins.
- Earnings reports: SAP SE (SAP), Stryker (SYK), RTX (RTX), Boeing (BA), Lockheed Martin (LMT), Starbucks (SBUX), Chubb (CB), Royal Caribbean (RCL), General Motors (GM), and Sysco (SYY).
Wednesday, Jan. 29
- U.S. Trade Deficit (December).
- Wholesale Inventories (December).
- Retail Inventories (December).
- FOMC Interest Rate Decision and Powell’s press conference.
- Earnings reports: Microsoft, Meta Platforms, Tesla, ASML Holdings (ASML), T-Mobile US (TMUS), ServiceNow (NOW), and IBM (IBM).
Thursday, Jan. 30
- Gross Domestic Product (Q4 and full year 2024).
- Initial Jobless Claims (Week ending Jan. 25).
- Pending Home Sales (December).
- Earnings reports: Apple, Visa, MasterCard (MA), ThermoFisher (TMO), Shell (SHEL), Caterpillar, Comcast, Blackstone (BX), United Parcel Service (UPS), and Intel.
Friday, Jan. 31
- Employment Cost Index (Q4).
- Personal Consumption Expenditures Price Index (December).
- Chicago Business Barometer (January).
- Earnings reports: ExxonMobil, AbbVie (ABBV), Chevron (CVX), and Colgate-Palmolive (CL).
Fed Meeting and Economic Outlook
The FOMC will decide whether to cut interest rates for a fourth consecutive meeting. However, traders believe a rate cut is unlikely, as inflation remains persistent and the labor market is strong. Powell’s post-meeting remarks could influence market sentiment, especially if he provides guidance on future rate decisions.
On Thursday, the U.S. will release its fourth-quarter and full-year GDP results. The Atlanta Fed predicts 3% Q4 growth, slightly above Q3’s 2.8%. December’s PCE inflation data, due Friday, will reveal whether inflation climbed further after November’s 2.4% annualized rate.
Earnings Spotlight: Tech and Beyond
Several prominent companies are set to report earnings this week:
Wednesday
- Microsoft: Expected to provide updates on its $500 billion AI initiatives, including OpenAI.
- Meta Platforms: Anticipated to discuss increased investments in AI and emerging technologies.
- Tesla: Reporting amid delivery challenges and CEO Elon Musk’s involvement in the new Trump administration.
Thursday
- Apple: Under scrutiny following recent analyst downgrades due to concerns about iPhone demand.
Notable tech companies reporting include ASML Holdings, IBM, Intel, and ServiceNow.
Sector Highlights
- Energy: Oil producers ExxonMobil, Chevron, and Shell are set to report amid optimism surrounding energy policy changes under the Trump administration.
- Telecom: AT&T, T-Mobile, and Comcast earnings will provide insights into the telecommunications sector.
- Financials: Visa, MasterCard, and SoFi updates will shed light on consumer health as debt levels decline.
- Aerospace and Automotive: Boeing will host its investor call Tuesday, with RTX and Lockheed Martin also reporting. General Motors’ financials will follow an analyst upgrade after the company decides to shutter its Cruise robotaxi program.
My Take: Watch sentiment!
This week most likely will tell the short-term story of the current fragile market sentiment. With the Fed rate decision, critical economic data, and major earnings reports all unfolding this week, investors should brace for a potentially volatile market environment. Insights from Powell, GDP results, and inflation trends, combined with updates from key sectors like tech, energy, and finance, will be pivotal in shaping the market’s direction.