Wall Street rediscovered its winning ways last week, thanks to some promising inflation data. Investors are now focusing on Donald Trump’s first week in the White House and another earnings package. It was no surprise to see relatively muted action last Monday and Tuesday, given that markets were reeling from a tepid December jobs report on Jan. 10 that sent interest rates rising and sinking of shares. A weaker-than-expected producer price index last Tuesday left investors feeling a little more comfortable after the jobs scare. However, it was last Wednesday when animal spirits really hit the market. That’s when we got an encouraging consumer price index in December and a slew of big bank earnings that kicked off the fourth quarter reporting season with a bang and portended a positive year ahead. The CPI, in particular, took the hammer to Treasury yields and allayed fears that the Federal Reserve may not cut rates as much this year. It added up to a week in which the S&P 500 climbed 2.9%, the tech-heavy Nasdaq gained 2.45%, and the Dow Jones Industrial Average jumped 3.7%. It was the first positive week of the year for major indexes after starting 2025 with consecutive losses. Meanwhile, the S&P 500 and Dow had their best weekly gains since the week of the presidential election in November. A trio of Club names helped paint that bullish picture last Wednesday, with financial holdings Goldman Sachs, Wells Fargo and BlackRock all reporting strong gains. Goldman Sachs feels as good as we do about M&A activity, as well as initial public offerings, in 2025. “While some policy uncertainty remains, there is an expectation that the regulatory burden will be reduced, which should serve as a tailwind to de-risk assets and capital deployment,” CFO Denis Coleman said on the earnings call. “We are optimistic about the outlook for 2025 and expect to further improve M&A and IPO activity.” Goldman’s report helped make the name the biggest portfolio gainer for the week, rising 11.8%. Wells Fargo was rewarded for its strong quarterly earnings and rosy outlook, ending the week as the portfolio’s second-best holding, up 10.2%. The firm demonstrated that it is on track to deliver a sustainable return on tangible common equity of 15% over the long term, after achieving a ROTCE of 13.4% for the full year 2024. The bank also offered a better outlook than expected net interest income and total expenses for the current year. BlackRock proved the doubters wrong as what is expected to be a key year of expansion into fast-growing markets such as private lending gets under way. In addition to the firm receiving more net inflows than the Street expected, the company’s profitability was ahead of expectations thanks to further fee increases. Jim Cramer spent a good part of last week in San Francisco speaking with CEOs and industry experts at the JPMorgan Healthcare Conference. That included a chat with David Ricks, CEO of Eli Lilly, our worst performer last week after the GLP-1 drug giant cut its fourth-quarter guidance. Shares fell further on Friday after news that arch-rival Novo Nordisk’s GLP-1 drug will be subject to price negotiations with Medicare, effective in 2027. However, we remain bullish and see the weakness as a buying opportunity. In his Sunday column, Jim wrote about the 10 things he learned at the JPMorgan conference. Another struggling club stock was Apple, which sold off heavily on Thursday on a disappointing report on iPhone sales in China. This followed a forecast of falling shipments by closely watched Apple analyst Ming-Chi Kuo last week. Apple is our second-worst performing stock this year, behind only troubled Constellation Brands. We expect the stock’s fortunes to improve, but not yet. On Monday, Trump was sworn in as president as markets closed in observance of Martin Luther King Jr. Day. Still, investors will be paying attention to the initial installment of Trump’s executive orders, along with other market-moving comments and decisions he makes in the coming days. Trump’s actions on tariffs and energy policy will be particularly visible. Trump also said he would hold off on enforcing the TikTok ban for at least 75 days. TikTok’s dark situation has implications for the club’s name Meta Platforms. From Washington to Wall Street, we’ll have a bit of a lull before fourth-quarter earnings season intensifies for the Club. The only portfolio company set to report is Abbott Laboratories on Wednesday morning. After the company won a landmark legal victory in November over its specialty formula for premature babies, we’re looking to put the basics front and center. This includes Abbott Labs’ new consumer-focused continuous glucose monitoring system, Lingo. “Lingo is doing well,” CEO Robert Ford told Jim at the JPMorgan Healthcare Conference, and we expect to get additional insight into Lingo’s sales on Wednesday’s earnings call. Going forward, we think Abbott stock will likely turn out to be very cheap based on 2025 earnings estimates as investors come to appreciate the strength and diversity of Abbott’s offerings. According to LSEG, the Street is looking for fourth-quarter sales of $11.01 billion and earnings of $1.34 per share. There is a real lack of economic news in the coming days. For this reason, earnings reports and management commentary on conference calls should be an important driver of market action. We are big believers in paying attention to earnings across the corporate world, not just within the portfolio, because management teams provide real-time, forward-looking feedback. Contrast that with economic data releases, which are generally lagging in nature, often by a month or more. In other words, CEOs and CFOs can provide more useful information to investors than what can be gathered in, say, a monthly production report. Case in point: On Friday, we’ll get existing home sales for December from the National Association of Realtors, but we’re much more interested in what we hear from homebuilder DR Horton when it reports on Tuesday. 3M and GE Aerospace report earnings on Tuesday and Thursday morning, respectively, which combined will provide what we call a “readthrough” in the name of the Honeywell club. Like Honeywell, 3M is a diversified industry with exposure to a variety of end markets such as energy, healthcare and aerospace, so its results and executives’ insights into the broader economic environment will be of interest. It’s a similar dynamic a few days later with GE Aerospace, except for the numbers, and the discussion will be mostly relevant to Honeywell’s aerospace business. We’ll have to wait until February 6 to hear from Honeywell, when the company is expected to announce a spin-off of its aerospace unit. Procter & Gamble reports results on Wednesday morning, providing readings in several portfolio-relevant areas, including the overall picture of consumer spending, including China. Commentary on input costs and future plans for price increases are important to the inflation story. With its global presence, P&G will also show how US-based multinationals are being affected by a strong dollar. The US dollar index, which measures the greenback against a basket of other currencies, has been trending higher since September and is trading near its highest level since 2022. Week Ahead Tuesday, January 21 Before the Bell : Charles Schwab (SCHW), DR Horton (DHI), KeyCorp (KEY), 3M (MMM), Fifth Third Bancorp (FITB), Prologis (PLD) After the bell: Netflix (NFLX), United Airlines (UAL), Interactive Brokers (IBKR), Capital One Financial (COF) Wednesday, January 22 Before the bell: Abbott Labs (ABT) , Procter & Gamble (PG) , Halliburton (HAL ), Johnson & Johnson (JNJ), GE Vernova (GEV), Travelers (TRV) After the Bell: Kinder Morgan (KMI), Alcoa (AA), Discover Financial Services (DFS), SL Green Realty (SLG) Thursday, January 23 08:30 ET: Initial Jobless Claims Before the bell: GE Aerospace ( GE ), American Airlines ( AAL ), Freeport-McMoRan ( FCX ), Elevance Health ( ELV ), Alaska Air ( ALK ), Union Pacific ( UNP ), McCormick & Company ( MKC), After the Bell: Texas Instruments ( TXN ), Intuitive Surgical ( ISRG ), CSX ( CSX ) Friday, January 24 10:00 AM ET: Existing Home Sales Before the Bell: Verizon Communications ( VZ ), American Express ( AXP ), Ericsson ( ERIC ), HCA Healthcare ( HCA ), NextEra Energy ( NEE ) (Jim Cramer’s charity is during GS, WFC, BLK, AAPL, LLY, HON, META and ABT. See here for a complete list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a share in his charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY ALONG WITH OUR STATEMENT. NO OBLIGATION OR FIDUCIARY DUTIES EXIST, OR ARE CREATED BY VIRTUE OF YOUR RECEIVING ANY INFORMATION DIRECTED IN CONNECTION WITH THE INVESTOR CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
A cut of President-elect Donald Trump as traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) during the first session of the new year on Jan. 2, 2025, in New York City.Â
Timothy A. Clary | Afp | Getty Images
Wall Street rediscovered its winning ways last week, thanks to some promising inflation data. Investors are now focusing on Donald Trump’s first week in the White House and another earnings package.
