*Performance since 7/1/2022. For more details on the performance calculation and methodology of Alpha Picks, click here. |
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► Major indices experienced varied movements this week following geopolitical developments, strong U.S. employment figures, and mixed but encouraging signs in inflation data.
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► A relief rally ended the week as Treasuries slid, with the 10-year plunging as low as 4.64% on mixed CPI data; CPI rose 0.4% m/m and 2.9% y/y, with cooling core CPI of 0.2% m/m and 3.2 y/y.
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► Sticky inflation could result in the Fed pausing cuts for January and March, and December's Jobs Report revealed the addition of 256,000 jobs, surpassing expectations.
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► Bitcoin surged alongside advancements in Financials like JPMorgan Chase (JPM), Citigroup ©, and Wells Fargo (WFC), which reported robust earnings and positively impacted the banking sector.
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► Wildfires in California persist. Meanwhile, a ceasefire agreement between Israel and Hamas may introduce stability in the Middle East, affect energy markets, and reduce geopolitical tensions.
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Alpha Picks is a rigorous, data-driven model that offers Strong Buy-rated stocks believed to have the highest probability of capital appreciation based on a proprietary quantitative model. Two Strong Buy-rated stocks are selected monthly on the first trading day of the month and the 15th or the closest trading day thereafter. |
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Global Market Movements and Sector Performance |
Plans for a TikTok ban have gained attention, drawing considerable political and market interest. The Biden administration's law demanding ByteDance (BDNCE) divest TikTok's U.S. operations or face a ban takes effect on January 19th. Read More. |
Geopolitical Events: Trump 2.0 And Israel-Hamas Ceasefire
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The Israel-Hamas ceasefire is set to begin Sunday, January 19th, a day before President Trump's Inauguration. The ceasefire agreement has been one of the most significant events impacting the markets this week in hopes of bringing stability to the Middle East, alleviating prolonged conflict concerns and potential disruptions to global energy supplies. Read More. |
The Financials sector (XLF) was bolstered by strong earnings reports from major banks like JPMorgan Chase (JPM) and Citigroup (C). Investor optimism following news of the Israel-Hamas ceasefire contributed to The Energy sector's (XLE) outperformance for the week. Read More. |
Value Stocks vs. Growth Stocks
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Value stocks outperformed growth stocks this week, likely driven by the Fed's more "cautious" approach to lower interest rates…While value stocks experienced mixed performance in 2024, with small-cap value sliding this past week, many benefited from continued consumer strength. Read More. |
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Bitcoin Gains on Persistent Inflation
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Cryptocurrencies experienced positive movements this week. Bitcoin's (BTC-USD) performance was notably strong, bolstered by economic indicators and market reactions. Bitcoin advanced over 3% to cross the $100K mark again after a softer-than-expected core inflation print reassured investors about the Fed's likelihood of maintaining the current interest rate, reducing speculation around hikes. Read More. |
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The dollar fell Tuesday on reports of Trump paring back tariff plans, yet emerging markets continue to feel the effects of the strengthening greenback. Read More. |
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While the S&P 500 has rallied 4.7% over 80 days since the Fed began its 2024 easing cycle, sector performance has been uneven. Consumer Discretionary has pulled ahead, surging 16.1%. Meanwhile, Health Care underperformed, falling -9.6%. |
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► FOMC: December's strong jobs report complicates the Fed's rate-cutting campaign. The Federal Open Market Committee maintained interest rates. Expectations are that upcoming meetings may see gradual rate cuts supported by strong employment data.
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► Inflation: Headline CPI rose as expected, up 0.4% last month, showing headline inflation at 2.9% YoY and core inflation at 3.2% YoY, indicating persistent price pressures.
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► Labor Market: Recent employment data reported an addition of 256,000 jobs in December, significantly exceeding the consensus expectation of 155,000 jobs. This enhances the outlook for future job reports and economic growth.
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| U.S. Markets Closed - Martin Luther King, Jr. Day Donald Trump Inauguration Day |
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| Netflix, Inc. (NFLX) General Electric Company (GE) |
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| The Proctor & Gamble Company (PG) Johnson & Johnson (JNJ) |
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| Intuitive Surgical, Inc. (ISRG) Union Pacific Corporation (UNP) |
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| | American Express Company (AXP) Verizon Communications Inc. (VZ) |
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*Performance is as of January 17, 2025. Alpha Picks adds two stocks per month - on the closest business day to the 1st & 15th. Alpha Picks removes stocks based on rating thresholds (i.e., when a rating changes to a sell). Performance is calculated and reported daily using time-weighted returns. For more details on the performance calculation and methodology of Alpha Picks, click here.
Past performance is no guarantee of future results. Alpha Picks does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Any content and tools on the platform are offered for information purposes only. Any views or opinions expressed may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank. |
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