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Investors Await Clouds Parting; CPI Ahead of Wednesday's Bell

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Tuesday, January 14, 2025

Most market indexes closed in the green today, with the notable exception of the Nasdaq, which fell pretty steeply into the final hour of trading and was not able to rebound into positive territory. The Dow gained +212 points, +0.52%, followed by the S&P 500, which came in +0.11%. The Nasdaq slipped -43 points, -0.23% on the session, while the small-cap Russell 2000 outpaced the other indexes, +1.1% today.

Monthly Budget Improves from Deep Downward Revision


The December U.S. Fed Budget report came out this afternoon, with a big improvement month over month but still a deeper deficit than analysts’ consensus had been expecting: -$87 billion from the -$75 billion anticipated. The November print was adjusted much lower to -$367 billion, with a shift in benefit payments being allocated to that month. It’s the deepest cut to the first three months in a fiscal year ever: -$711 billion.

December brought in $454 billion in total receipts, with $212 billion coming from individual income taxes and only $87 billion from corporations. The outlays were $124 billion in Social Security payments, $83 billion to Defense and $81 billion to Healthcare. Interest on the debt alone came to $82 billion for the month.

What to Expect from the Stock Market Wednesday


Tomorrow morning, the unofficial start to Q4 earnings season begins, with some of Wall Street’s biggest banks posting results. Among these are Zacks Rank #2 (Buy)-rated JPMorgan Chase (JPM - Free Report) and Citigroup (C - Free Report) , along with Zacks Rank #1 (Strong Buy)-rated Wells Fargo (WFC - Free Report) . JPMorgan and Wells Fargo are both looking for their 10th straight quarterly earnings beat; Citi goes for its eighth in a row.

But it is Citi, of the three, demonstrating the strongest growth year over year: earnings are expected to come in +48.8% from a year ago on +12% in revenues. By comparison, JPMorgan is expected to have grown +1.26% on earnings and +6.17% on revenues. Wells Fargo is forecast to have generated +3.88% earnings growth and +0.37% on its top line.

Consumer Price Index (CPI) numbers for December also will hit the tape an hour ahead of the opening bell Wednesday. Expectations are for steady +0.3% gains month over month on both headline and core, whereas yearly numbers are expected to tick up 20 basis points to +2.9% on headline and flat on core at +3.3%. Should these results by and large come to pass, it will be another tepidly stubborn inflation number — nothing that would change the Fed’s mind about not cutting interest rates.

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