Earnings Season for the fourth quarter of 2024 is essentially in the history books and rearview mirror now, with 97% of the companies in the Standard & Poor’s 500 Index having already reported earnings. Looking at those results – 75% of S&P 500 companies have reported a positive Earnings Per Share surprise (which is equal to the 10-year average) and 63% have reported a positive revenue surprise (which is below the 10-year average of 64%) – according to data from FactSet.
As we mention (at least once) every earnings season, profits are the mother’s milk of stock prices and what ultimately drive the market. Included in the last trickle of reports still to flow in, notable companies reporting this week include Best Buy, CrowdStrike, The Campbell’s Company, Broadcom, and Costco Wholesale. Again, with 97% of reports already in, along with mega cap and Artificial Intelligence poster child NVIDIA having reported last week, Wall Street is past the latest round of quarterly earnings and looking ahead. Current and future items in the spotlight include inflation, interest rates, and the health of the U.S. economy.
One of the most important data points on the health of the economy comes this week, when the Jobs Report is released Friday morning. Consensus estimates are the U.S Bureau of Labor Statistics will report the economy added 155,000 jobs last month and the unemployment rate held steady at 4%. The jobs data is used by the Federal Reserve to help determine monetary policy. Expectations and forecasts for the next interest rate move by the Fed have been fluctuating quite a bit lately, and a major move in either direction on the employment front may firm up the outlook.
Along with the above usual suspects being on the market’s radar, investors will also be watching for developments on the tariff front and the geopolitical stage, especially after an Oval Office meeting between President Trump and Ukraine President Volodymyr Zelensky became heated and ended without any agreements. So, while it won’t be due to earnings reports, it may still be another busy and volatile week ahead for the stock market.
Looking at the market action from last week, the three major averages shrugged off the setback in the Ukraine negotiations and rallied about 1.5% each on Friday. For the week, however, performance was mixed as the market saw general rotation out of growth names and some previous highflyers – leaving the tech-heavy NASDAQ Composite down 3.47% for the week, to close at 18,847. The Standard & Poor’s 500 Index fell 1% to 5,954 while the Dow Jones Industrial Average notably outperformed, rising 1% to 43,841.
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All the best – Southport Station Financial Management, LLC