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In the Global Week Ahead, investors get a taste of what Donald Trump's return to the White House might mean for:
Markets,
Global trade, and
International relations
Trump's inauguration on Jan. 20th as the 47th U.S. president will likely bring with it a Day One-barrage of executive orders on anything from taxes to tariffs.
Just as the fourth-quarter S&P500 earnings season gets underway, in earnest.
Here are Reuters’ five world market themes, reordered for equity traders—
(1) A New U.S. Presidency Gets Underway
Investors everywhere are waiting for Trump to begin his second term as U.S. president on Monday.
He has pledged to sign a flurry of executive orders on his first day in office, and some speculate he could begin right after his inauguration, before even the ceremonial parade.
U.S. markets are closed Monday for Martin Luther King Jr. day, so it may not be until Tuesday that investors can fully react.
Any early moves on tariffs will be a particular focus, after the leaks, counter-leaks and denials that have already riled currencies and shares in big global manufacturers.
Long-dated bond yields have risen ahead of Trump's inauguration, as traders expect his proposed tax cuts and tariffs to be inflationary and to stimulate domestic growth.
But as the U.S. debt-to-GDP ratio is pushing 100%, former policymakers are wondering whether bond vigilantes are lying in wait.
(2) S&P500 Q4-2024 Earnings Continue to Roll In
Investors counting on a solid 2025 for U.S. corporate profits to boost stocks will get a fuller picture of the outlook in the coming week.
Now a separate source says Barclays has discussed buying its business in the country.
A wide swathe of Corporate America is set to post results for the last quarter of 2024 and give a view into the year ahead.
The coming week includes earnings from streaming firm Netflix (NFLX - Free Report) , healthcare giant Johnson & Johnson (JNJ - Free Report) , consumer products maker Procter & Gamble (PG - Free Report) , and credit card company American Express (AXP - Free Report) .
Major banks kicked off quarterly earnings season on Jan. 15th, with profits at some of the biggest U.S. lenders rising, as deal-making picked up and trading was boosted by strong equity markets.
Overall, S&P 500 companies are expected to post an increase of 10.4% in the fourth-quarter earnings from the same period the previous year, according to LSEG IBES data as of Jan. 15th.
(3) Globally, Worries About Energy Costs Rise
European policymakers are getting exactly what they don't want right now — higher borrowing costs and soaring energy prices.
Oil has risen by +10% this month alone, egged-on by concern about the impact of more Western sanctions on Russian crude, while right in the middle of winter, natural gas prices have roared higher.
More worryingly for Europe, the euro has hit 14-month lows against the dollar, just a whisker above the $1.0 mark.
Since Russia's invasion of Ukraine in February 2022, the United States has become Europe's biggest supplier of natural gas in liquefied form (LNG) and a major source of crude oil, meaning the weakness in the currency is a double headache.
The upcoming December final inflation numbers for the Eurozone are unlikely to capture those price increases, meaning a possible nasty surprise, later on.
(4) The Davos Global Summit Happens: I.D.ing War as the Main Risk of 2025
Trump is expected to continue to shape momentum in wars raging in Ukraine and the Middle East.
The Israel-Hamas ceasefire to end the deadly 15-month-old Gaza conflict entered into effect on Sunday, starting with the release of Israeli hostages and Palestinian prisoners.
Hopes for stabilization have lifted the region's bonds and stocks, and could shape oil markets.
Bringing peace to Ukraine -- nearing its fourth year of war -- might take longer than the 'Day One' fix Trump pledged, but markets are gearing up for how this will reshape the region.
Trump is set to virtually address leaders and CEOs, including Ukraine President Volodymyr Zelensky and Israeli officials, who are scheduled to gather in Davos from Monday.
A pre-summit survey has identified war as the main risk of 2025.
(5) The Bank of Japan (BOJ) Holds First Policy Meeting of 2025
The Bank of Japan (BOJ) heads into its first policy meeting of the year. The yen is languishing near six-month lows, though a rate hike could be the panacea for the currency's pain against a towering dollar, even if only temporarily.
And it seems policymakers at the central bank are priming markets for such a move, after both Governor Kazuo Ueda and his colleague Ryozo Himino said the decision would be up for debate at the BOJ's Jan. 23rd-24th policy meeting.
It helps that U.S. President-elect Trump's inauguration occurs just a few days before, which gives the BOJ some time to weigh up how his policies could ripple through financial markets.
Regardless, traders have reacted to BOJ officials' remarks by raising their bets on a January rate hike.
Futures now point to a 70% chance of a 25-basis-point increase.
Zacks #1 Rank (STRONG BUY) Stocks
Next are three very large market cap Zacks #1 rank U.S. listed stocks.
(1) Wells Fargo (WFC - Free Report) ): This is a $77 a share stock with a market cap of $256.6B. It is found in the U.S. Financial-Investment Bank industry. 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 & Company is one of the largest financial services companies in the United States, with $1.92 trillion in assets as of Sep. 30th, 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.
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 aCorporate (0.6%) category.
(2) Service Now (NOW - Free Report) : This is a $1071 a share stock with a market cap of $220.7B. It is found in the Computers-IT Services industry. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Santa Clara, CA-based ServiceNow Inc. provides cloud computing services that automate digital workflows to accelerate enterprise IT operations. The company’s Now Platform enables enterprises to enhance productivity by streamlining system processes.
By utilizing ServiceNow’s product portfolio, customers can design any workflow application to reduce the manual time taken by complex processes, and consequently optimize total cost of ownership or TCO.
The company’s solutions address the needs of many departments within an enterprise, including IT, human resources (HR), facilities, field service, marketing, customer service, security, legal and finance.
The Now Platform is the foundation of the company’s cloud-based services.
The company has three product suites for IT management and operations. These are IT Service Management (ITSM), IT Operations Management (ITOM) and IT Business Management (ITBM) solutions.
Non-IT products include Customer Service, HR and Security Operations. ServiceNow’s end-markets are quite varied, which includes financial services, consumer products, IT services, health care, government, education and technology. In 2023, total revenues came in at $8.971 billion.
ServiceNow derives revenues from two sources: subscriptions (96.8% of 2023 revenues) and professional services and other (3.2% of 2023 revenues).
North America, Europe, the Middle East and Africa (EMEA), and Asia Pacific & Other contributed approximately 63.6%, 25.6% and 10.8% of revenues, respectively, in 2023.
The company operates data centers in Australia, Brazil, Canada, Hong Kong, Netherlands, Singapore, Switzerland, UK and the U.S. ServiceNow has approximately 8,100 enterprise customers.
(3) Qualcomm (QCOM - Free Report) :This is a $164 a share stock with a market cap of $182.8B. It is found in the Wireless Equipment industry. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Headquartered in San Diego since 1985, Qualcomm is a fabless semiconductor company. Its primary division, QTI (Qualcomm Technologies) designs high-performance, low-power chip designs for mobile devices, PCs, XR, automotive, embedded, wearable, robotics, connectivity and AI use cases.
Qualcomm’s brands include Snapdragon systems-on-chip, FastConnect Wi-Fi and Bluetooth systems, and Qualcomm-branded 5G, 4G, and IOT equipment.
The company is currently pursuing the integration of on-device generative AI into all of its product lines.
Qualcomm’s licensing division, QTL (Qualcomm Technology Licensing) manages the company’s large intellectual property portfolio, which includes key patents involved in 3G, 4G, 5G and other technologies.
Qualcomm has three reportable segments, namely:
QCT (Qualcomm CDMA Technologies)
QTL, and
QSI (Qualcomm Strategic Initiatives)
The company conducts business operations primarily through its QCT semiconductor business and QTL licensing business.
QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies, including RFFE (radio frequency front-end), for use in mobile devices, automotive systems, digital cockpit, and IoT including consumer electronic devices, industrial devices, and edge networking products.
QTL grants licenses or provides rights to use portions of its intellectual property portfolio, while the QSI reportable segment makes strategic investments. Almost all the products and services businesses, including QCT, and substantially all the engineering and research and development functions are operated by QTI.
Key Global Macro
This will likely be a trading week dominated more by political events than broad global macro indicators.
On Monday, the U.S. President gets inaugurated. This is also the Martin Luther King birthday holiday. U.S. stocks listed on the NYSE do not trade.
The World Economic Forum gets underway in Davos, Switzerland.
There is a PBoC policy rate meeting. 3.1% should remain as the loan policy rate.
On Tuesday, there is a Eurogroup meeting.
The U.K.’s ILO Household Unemployment Rate should hold steady at 4.3% in NOV.
The Eurozone ZEW Economic Sentiment survey for JAN should be 16.9, mostly in line with the prior 17.0 reading.
On Wednesday, the ECB’s President Lagarde gives a speech.
On Thursday, U.S. Weekly Jobless Claims should remain low at 218K. The prior week was low at 217K.
On Friday, the BoJ policy rate decisions come out. The current policy rate is 0.25%, and a lift to 0.5% is consensus. There will be a presser.
Conclusion
On Jan. 17th, 2025, Zacks Research Director Sheraz Mian supplied an update, on the S&P500 Q4-2024 earnings season:
“The banks and other Finance sector companies gave us a strong start to the Q4 earnings season.”
“However, we will see if this favorable trend continues this week as the Q4-24 reporting cycle really ramps up, with more than 150 companies reporting results, including 36 S&P500 members.”
“By the end of the week, we will have seen Q4-24 results from more than 15% of S&P500 members, giving us a very good sense of the overall earnings season.”
“Through Friday, January 17th, we have seen Q4-24 results from 42 S&P500 members that collectively account for 9.5% of the index’s total market capitalization.”
“Total earnings for these S&P500 companies are up +21.8% from the same period last year, on +7.3% higher revenues.
81% of the companies beat EPS estimates.
71.4% beat revenue estimates.”
Enjoy a successful week of trading and investing.
Warm Regards,
John Blank, PhD. Zacks Chief Equity Strategist and Economist
See More Zacks Research for These Tickers
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A New U.S. Presidency Begins: Global Week Ahead
In the Global Week Ahead, investors get a taste of what Donald Trump's return to the White House might mean for:
Trump's inauguration on Jan. 20th as the 47th U.S. president will likely bring with it a Day One-barrage of executive orders on anything from taxes to tariffs.
Just as the fourth-quarter S&P500 earnings season gets underway, in earnest.
Here are Reuters’ five world market themes, reordered for equity traders—
(1) A New U.S. Presidency Gets Underway
Investors everywhere are waiting for Trump to begin his second term as U.S. president on Monday.
He has pledged to sign a flurry of executive orders on his first day in office, and some speculate he could begin right after his inauguration, before even the ceremonial parade.
U.S. markets are closed Monday for Martin Luther King Jr. day, so it may not be until Tuesday that investors can fully react.
Any early moves on tariffs will be a particular focus, after the leaks, counter-leaks and denials that have already riled currencies and shares in big global manufacturers.
Long-dated bond yields have risen ahead of Trump's inauguration, as traders expect his proposed tax cuts and tariffs to be inflationary and to stimulate domestic growth.
But as the U.S. debt-to-GDP ratio is pushing 100%, former policymakers are wondering whether bond vigilantes are lying in wait.
(2) S&P500 Q4-2024 Earnings Continue to Roll In
Investors counting on a solid 2025 for U.S. corporate profits to boost stocks will get a fuller picture of the outlook in the coming week.
Now a separate source says Barclays has discussed buying its business in the country.
A wide swathe of Corporate America is set to post results for the last quarter of 2024 and give a view into the year ahead.
The coming week includes earnings from streaming firm Netflix (NFLX - Free Report) , healthcare giant Johnson & Johnson (JNJ - Free Report) , consumer products maker Procter & Gamble (PG - Free Report) , and credit card company American Express (AXP - Free Report) .
Major banks kicked off quarterly earnings season on Jan. 15th, with profits at some of the biggest U.S. lenders rising, as deal-making picked up and trading was boosted by strong equity markets.
Overall, S&P 500 companies are expected to post an increase of 10.4% in the fourth-quarter earnings from the same period the previous year, according to LSEG IBES data as of Jan. 15th.
(3) Globally, Worries About Energy Costs Rise
European policymakers are getting exactly what they don't want right now — higher borrowing costs and soaring energy prices.
Oil has risen by +10% this month alone, egged-on by concern about the impact of more Western sanctions on Russian crude, while right in the middle of winter, natural gas prices have roared higher.
More worryingly for Europe, the euro has hit 14-month lows against the dollar, just a whisker above the $1.0 mark.
Since Russia's invasion of Ukraine in February 2022, the United States has become Europe's biggest supplier of natural gas in liquefied form (LNG) and a major source of crude oil, meaning the weakness in the currency is a double headache.
The upcoming December final inflation numbers for the Eurozone are unlikely to capture those price increases, meaning a possible nasty surprise, later on.
(4) The Davos Global Summit Happens: I.D.ing War as the Main Risk of 2025
Trump is expected to continue to shape momentum in wars raging in Ukraine and the Middle East.
The Israel-Hamas ceasefire to end the deadly 15-month-old Gaza conflict entered into effect on Sunday, starting with the release of Israeli hostages and Palestinian prisoners.
Hopes for stabilization have lifted the region's bonds and stocks, and could shape oil markets.
Bringing peace to Ukraine -- nearing its fourth year of war -- might take longer than the 'Day One' fix Trump pledged, but markets are gearing up for how this will reshape the region.
Trump is set to virtually address leaders and CEOs, including Ukraine President Volodymyr Zelensky and Israeli officials, who are scheduled to gather in Davos from Monday.
A pre-summit survey has identified war as the main risk of 2025.
(5) The Bank of Japan (BOJ) Holds First Policy Meeting of 2025
The Bank of Japan (BOJ) heads into its first policy meeting of the year. The yen is languishing near six-month lows, though a rate hike could be the panacea for the currency's pain against a towering dollar, even if only temporarily.
And it seems policymakers at the central bank are priming markets for such a move, after both Governor Kazuo Ueda and his colleague Ryozo Himino said the decision would be up for debate at the BOJ's Jan. 23rd-24th policy meeting.
It helps that U.S. President-elect Trump's inauguration occurs just a few days before, which gives the BOJ some time to weigh up how his policies could ripple through financial markets.
Regardless, traders have reacted to BOJ officials' remarks by raising their bets on a January rate hike.
Futures now point to a 70% chance of a 25-basis-point increase.
Zacks #1 Rank (STRONG BUY) Stocks
Next are three very large market cap Zacks #1 rank U.S. listed stocks.
(1) Wells Fargo (WFC - Free Report) ): This is a $77 a share stock with a market cap of $256.6B. It is found in the U.S. Financial-Investment Bank industry. 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 & Company is one of the largest financial services companies in the United States, with $1.92 trillion in assets as of Sep. 30th, 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.
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.
(2) Service Now (NOW - Free Report) : This is a $1071 a share stock with a market cap of $220.7B. It is found in the Computers-IT Services industry. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Santa Clara, CA-based ServiceNow Inc. provides cloud computing services that automate digital workflows to accelerate enterprise IT operations. The company’s Now Platform enables enterprises to enhance productivity by streamlining system processes.
By utilizing ServiceNow’s product portfolio, customers can design any workflow application to reduce the manual time taken by complex processes, and consequently optimize total cost of ownership or TCO.
The company’s solutions address the needs of many departments within an enterprise, including IT, human resources (HR), facilities, field service, marketing, customer service, security, legal and finance.
The Now Platform is the foundation of the company’s cloud-based services.
The company has three product suites for IT management and operations. These are IT Service Management (ITSM), IT Operations Management (ITOM) and IT Business Management (ITBM) solutions.
Non-IT products include Customer Service, HR and Security Operations. ServiceNow’s end-markets are quite varied, which includes financial services, consumer products, IT services, health care, government, education and technology. In 2023, total revenues came in at $8.971 billion.
ServiceNow derives revenues from two sources: subscriptions (96.8% of 2023 revenues) and professional services and other (3.2% of 2023 revenues).
North America, Europe, the Middle East and Africa (EMEA), and Asia Pacific & Other contributed approximately 63.6%, 25.6% and 10.8% of revenues, respectively, in 2023.
The company operates data centers in Australia, Brazil, Canada, Hong Kong, Netherlands, Singapore, Switzerland, UK and the U.S. ServiceNow has approximately 8,100 enterprise customers.
(3) Qualcomm (QCOM - Free Report) : This is a $164 a share stock with a market cap of $182.8B. It is found in the Wireless Equipment industry. I see a Zacks Value score of C, a Zacks Growth score of B and a Zacks Momentum score of F.
Image Source: Zacks Investment Research
Headquartered in San Diego since 1985, Qualcomm is a fabless semiconductor company. Its primary division, QTI (Qualcomm Technologies) designs high-performance, low-power chip designs for mobile devices, PCs, XR, automotive, embedded, wearable, robotics, connectivity and AI use cases.
Qualcomm’s brands include Snapdragon systems-on-chip, FastConnect Wi-Fi and Bluetooth systems, and Qualcomm-branded 5G, 4G, and IOT equipment.
The company is currently pursuing the integration of on-device generative AI into all of its product lines.
Qualcomm’s licensing division, QTL (Qualcomm Technology Licensing) manages the company’s large intellectual property portfolio, which includes key patents involved in 3G, 4G, 5G and other technologies.
Qualcomm has three reportable segments, namely:
The company conducts business operations primarily through its QCT semiconductor business and QTL licensing business.
Key Global Macro
This will likely be a trading week dominated more by political events than broad global macro indicators.
On Monday, the U.S. President gets inaugurated. This is also the Martin Luther King birthday holiday. U.S. stocks listed on the NYSE do not trade.
The World Economic Forum gets underway in Davos, Switzerland.
There is a PBoC policy rate meeting. 3.1% should remain as the loan policy rate.
On Tuesday, there is a Eurogroup meeting.
The U.K.’s ILO Household Unemployment Rate should hold steady at 4.3% in NOV.
The Eurozone ZEW Economic Sentiment survey for JAN should be 16.9, mostly in line with the prior 17.0 reading.
On Wednesday, the ECB’s President Lagarde gives a speech.
On Thursday, U.S. Weekly Jobless Claims should remain low at 218K. The prior week was low at 217K.
On Friday, the BoJ policy rate decisions come out. The current policy rate is 0.25%, and a lift to 0.5% is consensus. There will be a presser.
Conclusion
On Jan. 17th, 2025, Zacks Research Director Sheraz Mian supplied an update, on the S&P500 Q4-2024 earnings season:
“The banks and other Finance sector companies gave us a strong start to the Q4 earnings season.”
“However, we will see if this favorable trend continues this week as the Q4-24 reporting cycle really ramps up, with more than 150 companies reporting results, including 36 S&P500 members.”
“By the end of the week, we will have seen Q4-24 results from more than 15% of S&P500 members, giving us a very good sense of the overall earnings season.”
“Through Friday, January 17th, we have seen Q4-24 results from 42 S&P500 members that collectively account for 9.5% of the index’s total market capitalization.”
Enjoy a successful week of trading and investing.
Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist