Monday, January 20, 2025
Stock markets are closed today, in observance of the birthday of Civil Rights leader Dr Martin Luther King, Jr. We here at Zacks, however, are using this opportunity to take stock on where we are at this early moment in the new trading year. Shares are up in all major indexes — the Dow Jones, S&P 500, Nasdaq and small-cap Russell 2000 — by at least +2%, year to date.
This is also Inauguration Day for President-elect Donald Trump, who becomes only the second U.S. president after Grover Cleveland in 1892 to be elected to two non-consecutive terms. Since the election on November 5th of last year, these same indexes have risen +4.74% on the Dow, +5.60% on the S&P 500, +8.04% on the Nasdaq and +3.20% on the Russell 2000.
Overall, the previous election cycle was very good for stocks. The Dow gained +44.76%, the S&P +68.35%, the Nasdaq +95.90% and the Russell +9.83%. Clearly the AI boom had lots to do with this. Early on in the Joe Biden presidency, bringing an end to the Covid pandemic with mass vaccinations led to a surge in the economy we refer to as the Great Reopening. However, it also led the way to supply-chain bottlenecks that saw prices of goods and services skyrocket until the Fed began raising interest rates in March of 2022.
Markets are looking at the potential next four years with plenty of optimism: deregulation of corporate activity is expected to spur earnings. Sanctioning cryptocurrencies has already given rise to Bitcoin and its trading platforms such as Coinbase COIN, which is up +59% since Election Day. And global developments like a cease-fire between Israel and Hamas helps Trump re-enter the White House with a cooling of tensions in the region.
That said, there are also plenty of concerns to go along with Trump proposals for his new term. These include massive immigration deportment efforts, issues regarding national healthcare initiatives (especially regarding vaccinations) and a potential fight with deficit hawks within the Republican party about whether or not to once again slash the corporate tax rate.
This week, we’ll see Netflix NFLX, Johnson & Johnson JNJ and American Express AXP report Q4 earnings, among others. Earnings season enters its busiest time period over the next few weeks; so far, signs are good that the quarter was a healthy one — at least as far as the big Wall Street banks like JPMorgan JPM and Citigroup C are concerned.
Check out the updated Zacks Earnings Calendar here.
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