Last week’s tame inflation data sparked a market reversal, and this week, the risk-on momentum only gained strength. Megacap stocks took the lead, driven by NFLX’s blockbuster Q4 2024 earnings, reporting a record-breaking 18.9 million new subscribers. Adding to the bullish sentiment, President Trump’s inauguration on Monday fueled a rally, with markets anticipating a wave of pro-business policies ahead. Amid the excitement, the S&P 500 stood out as the sole major index to hit a fresh all-time high.
Next week promises heightened volatility with the January FOMC meeting and key earnings reports from heavyweights like AAPL, MSFT, TSLA, and more. At the last FOMC press conference, a few sharp comments from Fed Chair Jerome Powell triggered a significant sell-off. The question now looms: Will Powell rain on the bull’s parade once again? Let’s dive into the charts.
Weekly Analysis
SPY (SPDR S&P 500)
The SPY ETF led the major indices this week, closing strong at $607.97 (+1.75%). Price has confidently broken above its previous YTD highs around $600—a critical battleground heading into next week. With the Stochastic RSI at overbought levels, this could be the perfect moment for bulls to pause and catch their breath.
QQQ (Invesco QQQ Trust)
The QQQ ETF closed the week at $529.63 (+1.51%), now retesting its prior year-to-date highs from above. This level could act as previous resistance turned support, offering clues that another leg higher may be in the cards. With over 25% of the index set to report earnings next week, the stakes have never been higher.
IWM (iShares Russell 2000)
The IWM lagged behind this week but still closed in the green at $228.69 (+1.45%). The good news: Bulls managed to make a higher high, staying firmly above prior YTD levels. The bad news: Price faced a bearish rejection off the 50-day SMA on Friday after testing this key moving average for the first time in over a month.
Earnings
Notable Results
NFLX (Netflix)
- EPS: $4.27 vs $4.19 est
- REV: $10.25B vs $10.11B est
IBKR (Interactive Brokers)
- EPS: $2.06 vs $1.84 est
- REV: $1.39B vs $1.37B est
SCHW (Charles Schwab)
- EPS: $1.01 vs $0.91 est
- REV: $5.33B vs $5.19B est
MMM (3M Company)
- EPS: $1.68 vs $1.66 est
- REV: $5.81B vs $5.78B est
UAL (United Airlines)
- EPS: $3.26 vs $2.99 est
- REV: $14.70B vs $14.40B est
PG (Procter & Gamble)
- EPS: $1.88 vs $1.86 est
- REV: $21.90B vs $21.54B est
JNJ (Johnson & Johnson)
- EPS: $2.04 vs $2.01 est
- REV: $22.52B vs $22.44B est
AXP (American Express)
- EPS: $3.04 vs $3.04 est
- REV: $17.18B vs $17.16B est
TXN (Texas Instruments)
- EPS: $1.30 vs $1.20 est
- REV: $4.01B vs $3.87B est
ISRG (Intuitive Surgical)
- EPS: $2.21 vs $1.79 est
- REV: $2.41B vs $2.25B est
What’s Happening Now
Apple has received multiple downgrades and sell ratings as analysts weigh weak iPhone demand and tepid AI adoption. Since 2020, AAPL has climbed 176%. However, during that time, its P/E ratio nearly doubled from 19x to 37x earnings, meaning most of its price appreciation was simply multiple expansion. The tech giant reports earnings next Thursday, January 30th, with Jefferies projecting Apple will miss its 5% revenue growth guidance, adding pressure to its current valuation.
TEM (Tempus AI)
Nancy Pelosi closed out 2024 by selling 31,600 shares of AAPL worth approximately $8M—a well-timed decision as the stock has since fallen 11% following a slew of analyst downgrades. Pelosi has now shifted focus, adding $500K in GOOGL and AMZN calls, $1M in VST calls, and $100K in Tempus AI (TEM), a healthcare tech firm specializing in AI-driven precision medicine and one of her more intriguing new bets.
TSM (Taiwan Semiconductor)
TSM is up 10% less than a month into 2025, a rally that aligns with historic early-year seasonality. However, next week may bring challenges as TSM enters its worst week of the year, with a 20% win rate and a median return of -2.62% over the past decade. This seasonal weakness extends to SOXX, NVDA, TXN, and MU, making the semiconductor space a key focus as we approach tech earning season.
Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official Trendspider Newsletter!
Market Update Into September 7th: Inflation Data Incoming