Business & Markets Update

Stocks snapped a 2-week losing streak last week, with solid performance coming from a couple of the biggest names in tech (NVDA +7% / AAPL +8%). Markets continue to chew on a LOT of moving pieces on a day-to-day basis. The bulk of that daily volatility stems from 3 things, for now: The end of Q4 earnings season, ongoing geopolitical concerns, and an absolute barrage of tariff-related Trump headlines every other hour. Trump 2.0 uncertainty (mainly on the tariff front) remains an overhang during earnings calls/releases, and as mentioned here in recent weeks, this dynamic is likely in play for months before we have more definitive visibility and understand the actual implications.

A slightly hotter-than-expected inflation print also stuck out from last week. Airline fares, food, and energy costs were cited as the bulk of the increase in costs. We also saw a January retail sales report which dropped for the first time since last August, with colder weather pointing to a notable drop in auto sales. Who buys cars when it's cold outside? 😊

It’s worth keeping an eye on market breadth (discussed often in this newsletter) once again, as last week we saw the equal-weighted S&P underperform the market cap-weighted S&P by > 1%. This was a dynamic we saw just about every week in December ’24. The top 7 stocks (by mkt cap) have 1 notable standout in the last few weeks: META. Meta’s stock has not seen a down day since… January 16th. The last time Meta was down, Joe Biden was in office. Markets have been encouraged by, amongst many other things, AI investment and expansion from META, and AI integration across their advertising platform.

Short trading week on deck here, with markets closed today for Presidents Day.

We’ll hear from the last ~ 25% of the S&P 500 who are yet to report 4th quarter

earnings in the next ~ 10 days.

Charts that stuck out / Notable highlights

Meta since Jan 16th, steady as she goes, zero down days.. Nuts

S&P now +4% year-to-date and +25% over past 12 months

Two things taking everything up and to the right: Higher earnings + Higher multiples. Current valuations are highest we’ve seen since June 2000

International stocks are outperforming US stocks (by a lot) so far this year, a rare occurrence over a longer period of time, but getting plenty of attention in Q1 of ‘25

SX5E= leading 50 stocks from 11 Eurozone countries