The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

Stocks

Investors Await CPI and Bank Earnings: Will They Spark Investor Optimism?

by admin January 15, 2025
January 15, 2025
Investors Await CPI and Bank Earnings: Will They Spark Investor Optimism?

The December Producer Price Index (PPI) came in cooler than expected, as equities rose in early trading, sold off, and then rebounded.

The Dow Jones Industrial Average ($INDU), S&P 500 ($SPX), S&P 400 Mid-Cap Index ($MID), and S&P 600 Small-Cap Index ($SML) closed higher. The Nasdaq Composite ($COMPQ) and the Nasdaq 100 Index ($NDX) closed lower. There’s concern the equity market is getting toppy.

Will the December CPI and bank earnings on Wednesday be able to juice the markets and turn investors optimistic? Let’s dive in.

FIGURE 1. THE STOCKCHARTS MARKET OVERVIEW PANEL. You can get a big-picture view of the entire stock market in this panel. Image source: StockCharts.com. For educational purposes.

Around the Market in Sectors

Utilities, Financials, Materials, and Industrials were the best-performing sectors, followed by Energy and Real Estate. The StockCharts Market Carpet below gives a bird’s eye view of Tuesday’s stock market’s performance.

FIGURE 2. STOCKCHARTS MARKETCARPET FOR TUESDAY JAN. 14. Utilities, Financials, and Industrials were the top three performing sectors.Image source: StockCharts.com. For educational purposes.

While Technology wasn’t the worst-performing sector — it eked out a 0.26% gain — the largest cap-weighted stocks were in the red. It was a similar scenario in the Communication Services and Consumer Discretionary sectors.

The Healthcare sector was the worst-performing sector on Tuesday, thanks to Eli Lilly’s loss of 6.59%.

Equity indexes have been chopping around. There needs to be more upside movement to confirm further bullishness.

The S&P 500 and Nasdaq are trading below their 21-day exponential moving average (EMA), which is trending lower. The moving average convergence/divergence (MACD) for both indexes is declining (see chart below).

FIGURE 3. S&P 500 INDEX AND NASDAQ COMPOSITE. The 21-day EMA and MACD need to reverse and turn higher to confirm a reversal.Chart source: StockChartsACP. For educational purposes.

The MACD line needs to turn upward and cross above its signal line to confirm a reversal. As of Tuesday’s close, it looks like it will be a while before that happens, but the stock market can shift on a dime.

All Eyes on Banks

Although the December Consumer Price Index (CPI) is expected on Wednesday, investors will have their eyes and ears peeled on bank earnings. Citigroup (C), JP Morgan Chase (JPM), Wells Fargo (WFC), and Goldman Sachs Group (GS) are up first. Bank earnings set the stage for earnings season, and strong reports from the big banks could fuel investor optimism, which the stock market badly needs. However, banks are an interest rate-sensitive industry group, and a hotter-than-expected CPI number could damper earnings. The dialing back of interest rate cuts this year is front and center in investors’ minds.

The SPDR S&P Bank ETF (KBE) is trading just below its 21-day EMA and the S&P Financial Sector Bullish Percent Index (BPI) is at 44.44 (see chart below). This is still not bullish — it’ll have to move above 50 — and the EMA needs to turn upward.

FIGURE 4. DAILY CHART OF SPDR S&P BANK ETF. Things haven’t looked rosy for banks since the end of November. What will it take to shake this interest-rate-sensitive group of stocks?Chart source: StockCharts.com. For educational purposes.

The bottom line: A hotter-than-expected CPI and lukewarm earnings from the banks could send the broader indexes lower. Investors seem to be somewhat nervous, so it’s not surprising to see the broader indexes grinding sideways. Add to that the possibility of only one interest rate cut in 2025 and uncertainty surrounding the incoming administration, and you have a situation where you need that inflation number to be cold and bank earnings to be stellar to see positive price moves. You don’t want to miss Wednesday’s stock market action.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

0
FacebookTwitterGoogle +Pinterest
previous post
GOP Sen. Joni Ernst officially backs Pete Hegseth for DOD after initial uncertainty
next post
The Bullish Case for Small Caps vs. Large Caps

Related Posts

Post-Fed Rally Ignites Flurry of New Highs

March 22, 2024

Rules-Based Money Management – Part 1: Popular Indicators...

April 19, 2024

Strongest Top 3 S&P 500 Stocks: Will They...

January 2, 2025

New SPX Correction Signal! How Long Will It...

March 20, 2025

From Hammer to Harami: Using StockCharts to Crack...

July 15, 2025

How to Buy WINNERS When They Pull Back!

December 14, 2024

AppLovin’s 1,303% Rise: The Hidden Power of the...

November 21, 2024

Sentiment And Small Caps Are A 1-2 Punch,...

March 5, 2024

Analyzing Alphabet’s Surge — Here’s How to Get...

April 27, 2024

Why Investors are Betting Big on Berkshire Hathaway...

June 27, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • The Real Drivers of This Market: AI, Semis & Robotics

      August 31, 2025
    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      August 31, 2025
    • Epstein estate to hand over ‘birthday book’ to lawmakers, House Dem says

      August 31, 2025
    • Dyan Cannon denied White House entry after lying about her age on passport documents

      August 31, 2025
    • Israel eliminates Houthi prime minister in Yemen airstrike targeting senior government officials

      August 31, 2025
    • Sen. Bernie Sanders calls on RFK Jr. to resign following departure of CDC officials

      August 31, 2025

    Categories

    • Business (1,370)
    • Politics (4,370)
    • Stocks (1,619)
    • Uncategorized (45)
    • World News (1,363)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved