In the Global Week Ahead, the U.S. Federal Reserve’s FOMC, the European Central Bank (ECB), and the Bank of Canada (BoC) hold their first meetings of 2025.

Into this week’s mix go Q4-24 S&P500 earnings from heavyweights, including Apple (AAPL Quick QuoteAAPL - Free Report) and Tesla (TSLA Quick QuoteTSLA - Free Report) , and likely market spikes from comments by new U.S. President Donald Trump — especially any on tariffs.

Next are Reuters’ five world market themes, re-ordered for equity traders—

(1) Major European Companies Report Earnings Across This Week

Europe's earnings season is overshadowed by uncertainty over Trump's policies, although Q4 numbers are expected to be marginally positive.

According to LSEG I/B/E/S estimates, Q4-24 earnings, on average, rose +1.9% from the same period in 2023, driven by growth in utilities and financials. Energy names are expected to drag.

Geopolitics and weak Eurozone business activity should be offset by a robust U.S. economy and falling euro, a tailwind to exporters, supporting earnings.

After all, 40% of the STOXX 600 index revenue comes from outside Europe.

Luxury bellwether LVMH (LVMUY Quick QuoteLVMUY - Free Report) reports Tuesday, Dutch computer chip equipment maker ASML (ASML Quick QuoteASML - Free Report) Wednesday and Deutsche Bank (DB Quick QuoteDB - Free Report) Thursday. Danish weight-loss drug manufacturer Novo Nordisk (NVO Quick QuoteNVO - Free Report) reports the week after.

European stocks attracted their second largest allocation in a quarter of a century in January, a BofA investor survey shows, a sign that sentiment is shifting even as Trump angst reigns.

(2) The U.S. FOMC Holds First Meeting of 2025

The Fed holds its first meeting of the year, just over a week after Trump's return to the White House.

The central bank is widely expected to pause its easing cycle on Wednesday, after cuts totaling 100 basis points (bps) last year.

Investors want to know how many more reductions are likely this year. Remember, the Fed rattled markets in December when it lowered projected rate cuts for 2025 as it braced for firmer inflation than it had previously estimated.

Since then, data showing slower underlying inflation brought relief, especially after a blowout jobs report.

Earnings reports will also take center stage, with mega-cap companies Apple (AAPL Quick QuoteAAPL - Free Report) , Tesla (TSLA Quick QuoteTSLA - Free Report) and Microsoft (MSFT) headlining a busy earnings week, while the advanced reading of Q4-24 U.S. economic growth is out Thursday.

(3) On Thursday, European Central Bank (ECB) Set to Cut Policy Rate

The ECB is set to cut rates again by another 25 bps on Thursday as tariff threats from the Trump administration cast a shadow over the Eurozone's sluggish economy.

Trump did not impose Day One tariffs and said the U.S. is not ready for universal ones, but Canada, Mexico and China are in the firing line, as is the European Union.

Traders are watching for further clues from ECB Chief Christine Lagarde that could move the needle for the three further cuts they expect this year after Thursday's move.

Some policymakers have also signaled agreement that rates will fall towards 2%, within the estimated range of the "neutral" rate that neither boosts nor restricts the economy.

The question is whether tariffs will change that. That depends on how they impact inflation.

(4) What Happens to a U.S. TikTok Ban and U.S. Tariff Hikes?

The United States' biggest trade partners face a nervous wait until the turn of the month, when Trump has threatened new tariffs on Canada, China and Mexico.

What may be surprising is the 10% levy faced by Beijing is dwarfed by the 25% duties promised for Trump's neighbors, and well below the 60% blanket tariff on Chinese imports previously mooted.

Perhaps the rekindled Trump-Xi Jinping “bromance” has something to do with it. Or maybe Trump is just starting slowly.

Either way, the self-proclaimed dealmaker looks as if he wants to bring Beijing to the negotiating table, with TikTok as the centerpiece.

So, the lead up to Feb. 1st could be busy with backroom conversations, though China breaks for the Lunar New Year on Wednesday.

Beijing made sure it acted before that, fortifying its stock market against tariff shocks with plans to channel tens of billions of dollars of investment from state-owned insurers into equities.

(5) What Other Actions Will the New U.S. Administration Show Markets?

For all the hand-wringing leading up to the inauguration, Trump's first week in office was mostly benign for markets.

Volatility across stocks, bonds and currencies has retreated, and demand for hedging risk around the Mexican peso, the Canadian dollar and the Chinese yuan has shrunk from the extremes hit on inauguration day.

Analysts expect there will be more detail on what tariffs Trump will apply and where on April 1st.

Before then, there is plenty of time for more of Trump's off-the-cuff comments, such as remarks to journalists on Jan. 21st that he was considering duties on China from Feb. 1st. Investors should brace for more roller-coaster price action.

Zacks #1 Rank (STRONG BUY) Stocks

I noted three major U.S. money center banks at the top of our #1 list this week.

Let’s look into their underlying share metrics.

(1) JPMorgan Chase & Co. (JPM Quick QuoteJPM - Free Report) : This is a $265 a share stock with a market cap of $748.7B. It is found in the Financial-Investment Bank industry at Zacks. I see a Zacks Value score of F, a Zacks Growth score of F and a Zacks Momentum score of A.

Image Source: Zacks Investment Research

Headquartered in New York, JPMorgan Chase & Co. is one of the biggest global banks, with assets worth $4 trillion and stockholders’ equity worth $344.8 billion as of Dec. 31, 2024. With operations in more than 60 countries, the company (incorporated under Delaware law in 1968) is one of the largest financial service firms in the world.

JPMorgan organizes its business through the following four reportable segments:

Consumer & Community Banking (CCB) segment (constituting 39.6% of total net revenues in 2024) serves consumers and businesses through personal service at bank branches and through automated teller machine (ATMs), online, mobile and telephone banking. CCB is organized into Consumer & Business Banking, Mortgage Banking and Card & Auto.

Commercial & Investment Bank (CIB) segment (38.9%) offers a wide range of IB, market-making, prime brokerage and wholesale payments services to a global client base of corporations, investors, financial institutions, government and municipal entities. The segment also offers lending, wholesale payments and investment banking services to corporations, municipalities, financial institutions and non-profit entities.

Asset & Wealth Management (AWM) segment (11.9%) provides services to institutions, retail investors and high-net-worth individuals. It offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity including money market instruments and bank deposits. The segment also offers trust and estate, banking and brokerage services.

Corporate segment (9.6%) consists of Treasury & Chief Investment Office (CIO) and Other Corporate, which includes corporate staff units and centrally managed expenses.

(2) Wells Fargo & Co. (WFC Quick QuoteWFC - Free Report) : This is a $77 a share stock with a market cap of $257.8B. It is also found in the Financial-Investment Bank industry at Zacks. I see a Zacks Value score of B, a Zacks Growth score of F and a Zacks Momentum score of A.

Image Source: Zacks Investment Research

San Francisco-based Wells Fargo & Co. is one of the largest financial services companies in the United States, with $1.92 trillion in assets as of Sep. 30, 2024.

The company provides banking, insurance, trust and investments, mortgage banking, investment banking, retail banking, brokerage services and consumer and commercial finance through 4,227 retail bank branches, broad automated telling machines (ATMs) network, the Internet and other distribution channels across North America and globally.

It provides services through following segments.

Consumer Banking and Lending (35.5% of the total loans as of Sep. 30, 2024) offers products and services, such as checking and savings accounts, credit and debit cards, as well as home, auto, personal and small business lending to consumers and small businesses with annual sales generally up to $10 million.

Commercial Banking (24.6%) provides banking and credit products across multiple industry sectors and municipalities, secured lending and lease products, and treasury management, to private, family-owned and certain public companies. Corporate and Investment Banking (30.1%) delivers services related to capital markets, banking and financial products to corporate, commercial real estate, government and institutional clients globally.

Wealth and Investment Management (9.1%) provides personalized wealth management, brokerage, financial planning, lending, private banking, trust and fiduciary products and services to affluent, high-net-worth and ultra-high-net-worth clients. All other business activities that are not included in the reportable operating segments have been included in a Corporate (0.6%) category.

In September 2023, Wells Fargo sold its investment in Norwest Equity Partners and Norwest Mezzanine Partners to a buyer group, including AlpInvest Partners, Atalaya Capital Management, Lexington Partners and Pantheon.

In fourth-quarter 2021, Wells Fargo sold its Corporate Trust Services (CTS) business, and asset management unit — Wells Fargo Asset Management. In August 2021, the bank combined its Treasury Management and Global Payment Solutions businesses.

(3) Morgan Stanley (MS Quick QuoteMS - Free Report) : This is a $138 a share stock with a market cap of $222.0B. It too is found in the Financial-Investment Bank industry at Zacks. I see a Zacks Value score of D, a Zacks Growth score of D, and a Zacks Momentum score of A.

Image Source: Zacks Investment Research

Founded in 1935 and incorporated under the laws of the State of Delaware in 1981, Morgan Stanley is the leading financial services holding company headquartered in New York.

With 80,205 employees, the company serves a diversified group of clients and customers — including corporations, governments, financial institutions and individuals — through offices across 41 countries.

The company’s business is divided into three segments:

The Institutional Securities ("IS") segment (contributing 42.6% of total net revenues in 2023) includes capital raising; financial advisory services that include advices on mergers and acquisitions (M&As), restructurings, real estate and project finance; corporate lending; sales, trading, financing and market-making activities in equity and fixed income securities and related products, including foreign exchange and commodities; benchmark indices and risk management analytics; and investment activities.

The Wealth Management ("WM") segment (48.5%) provides brokerage and investment advisory services covering various investment alternatives; financial and wealth planning services; annuity and other insurance products; credit and other lending products; cash management services; retirement services; and trust and fiduciary services and engages in fixed income principal trading.

The Investment Management ("IM") segment (8.9%) provides global asset management products and services in equity, fixed income, alternative investments that include hedge funds and funds of funds, and merchant banking including real estate, private equity and infrastructure, to institutional and retail clients through proprietary and third-party distribution channels. The segment also engages in investment.

In 2019, Morgan Stanley acquired Canada-based Solium Capital Inc. and renamed it as Shareworks by Morgan Stanley. In 2020, the company acquired E*Trade Financial. In 2021, it acquired Eaton Vance.

Key Global Macro

The central bank meetings at mid-week are the week’s main trading events.

On Monday, the Mainland China NBS manufacturing PMI for JAN comes out. I see the usual 50.1 reading following the usual 50.1 reading from DEC. The NBS non-manufacturing PMI looks to be out too. The prior reading there was 52.2.

U.S. New Home Sales for DEC should be 0.67M m/m. That improves on the prior 0.664 m/m reading.

On Tuesday, U.S. non-defense capital goods orders, ex-aircraft for DEC come out. The prior reading was +0.4% m/m.

The U.S. Case-Shiller Home Price Index for NOV comes out. The prior y/y reading was at +4.2% y/y.

On Wednesday, the Bank of Canada (BoC) monetary policy decisions come out. The consensus looks for a cut to 3.0% on the policy rate, from a 3.25% level.

The U.S. FOMC should keep its monetary policy rate at 4.5%. There is a Powell presser.

On Thursday, the European Central Bank (ECB) should lower its main refi operations policy rate to 2.9% from 3.15%.

U.S. initial jobless claims remain quite low. The 4-week moving average is 213.5K. We get a new week’s number.

On Friday, the U.S. core PCE price index for DEC comes out. The prior reading was a still-high +2.8% y/y number.

Conclusion

On Jan. 23rd, 2025 Zacks Research Director Sheraz Mian provided his most recent Q4-24 earnings update—

With Q4 results from 14% of S&P 500 members already out, we can confidently say that this reporting cycle is shaping up to be a good one for the market.

Not only are companies comfortably beating consensus estimates, particularly on the earnings front, but the growth pace represents a notable acceleration from the preceding periods.

Importantly, the tone and substance of management commentary is adding to confidence in the overall earnings outlook, which already reflected a strong growth momentum in 2025.

Through Thursday, January 23rd, we have seen Q4 results from 71 S&P 500 members or 14.2% of the index’s total membership.

• Total earnings for these companies are up +19.2% from the same period last year on +6.7% higher revenues, with 
• 83.1% beating EPS estimates and 
• 67.6% beating revenue estimates

This is better performance from this group of 71 index members relative to what we have seen from this group of companies in other recent periods.

It will be interesting to see if this performance can continue as we get into the heart of the reporting cycle in the coming days, particularly as we see more results from the Tech sector.

The Tech sector has been a key growth driver in recent quarters and the trend is expected to continue in Q4 and beyond.

While all sectors are expected to enjoy positive earnings growth in 2025, the Tech sector continues to be a significant growth contributor.

Enjoy the trading week!

Warm regards,

John Blank, PhD.
Zacks Chief Equity Strategist and Economist