Thursday, January 23, 2025

All major indexes began trading this early morning in the red, following three-straight up-days on the Dow, Nasdaq and S&P 500 (the small-cap Russell 2000 took a powder yesterday). But while the Dow has already crossed over into the green at this hour by +41 points, with the S&P close behind, the Nasdaq and Russell are sinking a tad lower.

Even with the dip across the board going back a week and a half ago, where market participants grew concerned we may see no more rate cuts for the entire rest of 2025, we’re still up notably from Election Day in early November last year. As it’s still early, there is plenty of time for these indexes to ramp up from here; the question will soon be — if it isn’t already — whether near-term valuations are too high.

Weekly Jobless Claims Tack Somewhat Higher

We’ve been tracking all labor market data closely going back a year or more — ever since economic data was forecasting a for-certain recession which has still yet to arrive — and we continue to see Initial Jobless Claims within a range of reasonably healthy. Last week, 223K new jobless claims were made, +2K higher than expected and +6K above the previous week’s unrevised tally. This is still obviously well below the outlier +260K we saw back in early October, which signaled a weakening labor market.

Only a few times in the past few months have Continuing Claims approached 1.9 million for a week, and this morning’s print is one of them: 1.899 million came in two weeks ago (Continuing Claims are reported a week in arrears from Initial Claims), a big surge from the prior week’s 1.853 million. What we’ve seen, going back to late September — when longer-term claims moved up from the low 1.8 million range almost every week) is that this 1.9 million level is where we see resistance. If we break through that over the next couple reads, we may see ourselves in a new range of higher jobless claims.

Q4 Earnings at a Glance: AAL, GE

Zacks Rank #1 (Strong Buy)-rated American Airlines (AAL Quick QuoteAAL - Free Report) reported a big positive earnings surprise in its Q4 release this morning, with 86 cents per share well outperforming the 64 cents expected — and nearly 3x the 29 cents per share reported in the year-ago quarter. Revenues of $13.66 billion in the quarter outpaced expectations by +1.81%. However, shares are selling off -5% in today’s pre-market on a big guide lower for Q1 earnings, even as full-year earnings guidance remains in-line. For more on AAL’s earnings, click here.

Check out the updated Zacks Earnings Calendar here.

GE Aerospace (GE Quick QuoteGE - Free Report) , following the Q4 report from its spinoff GE Vernova (GEV Quick QuoteGEV - Free Report) yesterday, soundly beat estimates on both top and bottom lines. Earnings of $1.32 per share surpassed the $1.03 Zacks consensus, while revenues of $9.88 billion surged past the $9.54 billion analysts were expecting. Full-year earnings guidance was also ratcheted up considerably, to $5.10-5.45 per share, and the stock is up +7% in the pre-market, now roughly +20% year-to-date.

What to Expect from Thursday’s Stock Market

We won’t be hearing from any Fed members the rest of the week, as they are currently in a “blackout period” ahead of the next FOMC meeting next week. On Wednesday of next week, we get the new Fed monetary policy statement, which will not bring about a move to the current +4.25-4.50% Fed funds rate. And no major economic reports are due after the opening bell.

What we will see are more Q4 earnings reports after the close today, including Texas Instruments (TXN Quick QuoteTXN - Free Report) , Da Vinci surgical systems provider Interactive Surgical (ISRG Quick QuoteISRG - Free Report) and railroad major CSX (CSX Quick QuoteCSX - Free Report) . We won’t get any of the big-time “Mag 7” stocks reporting earnings until next week.

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