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Market indexes turned around minutes ahead of today’s opening bell when, while addressing the World Economic Forum in Davos this morning, President Trump ruled out the use of military force to annex Greenland for the U.S. Once those words fell from his lips, the Dow gained +200 points within seconds.
Then, right around 2:30 pm ET, when Trump posted that he had reached a deal with the Secretary General of NATO to not slap February 1st tariffs on countries opposed to the U.S. annexation of Greenland in exchange for a Golden Dome defense shield deal for the country owned by Denmark, market indexes rallied again. We close off intra-day highs, but the Dow finished +588 points, +1.21%, the S&P 500 +78 points, +1.16% and the Nasdaq +270 points, +1.18%. The small-cap Russell 2000 took high honors today, +52 points or +2.00%.
That “risk off” switch that was flipped a day or two ago has now been flipped back the other way. Q4 earnings season has mostly been favorable, and economic reports coming up Thursday morning are anticipated to depict an overall healthy, if not outright robust, economy.
What to Expect from the Stock Market Thursday
With this Greenland/NATO/Davos issue behind us, we can once again focus on things like inflation numbers. The delayed Personal Consumption Expenditures (PCE) report for November will be posted ahead of tomorrow’s opening bell, with expectations for a still-warm but flattening-out +2.8% year-over-year rate on both headline and core. Meanwhile, the first revision to Q3 GDP (also delayed) is expected to be in-line with the initial print, +4.3%.
Thus, sub-3% inflation and over +4% productivity is a recipe for a strengthening economy. Again, we caution these numbers are a couple months out of date at this stage, so they are essentially backward-looking reports. December PCE had initially been scheduled for this Friday, but clearly that will need some more time to hit the tape.
Further, Weekly Jobless Claims come out, like almost every Thursday morning, and are expected to once again be somewhere around the +200K level on Initial Claims, which is also a strong print. Continuing Claims had sunk to sub-1.9 million over the past few weeks after half a year or so between 1.91-1.975 million longer-term jobless claims. All of these figures are consistent with a labor market holding its own in the current economy.
For earnings, Thursday is also the biggest day of the week. Ahead of the open, GE Aerospace GE, Abbott LabsABT and Procter & GamblePG come out, while IntelINTC, railroad major CSXCSX and medical devices maker Intuitive Surgical ISRG report after the close. Of these, only Abbott and Intuitive have Buy recommendations, while P&G and CSX are currently Zacks Rank #4 (Sell).
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Bath & Body Works’ strong brand, cost savings and Amazon entry support its transformation, expanding growth opportunities while strengthening retail productivity and financial flexibility.
Wheaton is poised to gain from its diversified portfolio of high-quality and long-life assets. Its strong cash position enables it to pay a competitive dividend and invest in accretive streams.
Southern Copper is poised to grow on the back of its copper reserves, solid growth projects and sound balance sheet. Further, a solid long-term outlook for metal prices bodes well.
KLA is a major player in each of its served markets. The company offers complete yield management solutions, including hardware, software and services that reduce production cost.
AI-driven semiconductor innovation, advanced packaging and market share gains in foundry logic to fuel growth. Strong balance sheet, expanding customer base and focus on cutting-edge semiconductor technologies are other positives.
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Merck faces persistent challenges for Gardasil in China, rising competitive pressure on the diabetes franchise and potential competition for Keytruda which is nearing patent expiration in 2028.
Home Depot tightens its fiscal 2025 outlook as housing softness, consumer caution, and low storm activity weigh on Q4, even as GMS boosts overall sales growth.
Netflix’s accelerating ad business, AI-driven innovation, record engagement on content strength, focus on originals across various genres and languages are key positives.
Strength in the Energy Generation/Storage business, balance sheet strength, and focus on autonomous driving and artificial intelligence are set to drive Tesla.
Central Garden & Pet advances digital, supply chain and product innovation while driving margin gains and M&A, backed by strong financials and a focused Cost and Simplicity program.
AbbVie’s Skyrizi and Rinvoq, are performing extremely well, bolstered by approval in new indications, which should support top-line growth in the next few years.
Intel’s leading position in PC market, strength in servers, growing clout in software, IoT & ADAS domains and headway in process technology are positive indicators of future growth prospects.