January 17, 2025

Yields were steady and equities gathered upside momentum today to close out the best week for the major averages since early November. Economic data was strong with Housing Starts and Permits beating expectations, while December Industrial production jumped +0.9% vs. +0.3% estimated. The different indexes opened sharply higher in a broad-based rally with the Healthcare (XLV) sector the only drag on prices. Clients were risk on with Technology (XLK), Consumer Discretionary (XLY), Communication Services (XLC) and Financial (XLF) outperforming. Semiconductors surged with the Philadelphia Semiconductor Index (SOX) jumping +2.84% finishing the period back above its 50, 100 and 200-day MA. Earnings were mixed with oil driller Schlumberger (SLB) soaring on a beat, while Fastenal (FAST) and JB Hunt (JBHT) sank after disappointing. Crypto related stocks were higher on hopes of a friendly new administration as Bitcoin crossed above $104,000. Coinbase (COIN) and Robinhood Markets (HOOD) both rallied more than +4.5%. The different indexes came off their highs the last hour on options expiration but finished with solid gains. The DJIA added 334.70 points (+0.78%) and settled at 43487.83, while the S&P 500 gained 59.32 points (+1.00%) and closed at 5996.66. The NASDAQ jumped 291.91 points (+1.51%) to 19630.20.

Breadth was positive with advancing issues beating declining issues 1.6:1 on the NYSE and 1.7:1 on the NASDAQ. Advancing volume was 57% on the NYSE and 67% of the NASDAQ. The VIX fell 0.63 (-3.80%) and closed at 15.97. Crude oil prices eased 0.68 (-0.86%) and the February contract closed at $78.00 a barrel. Gold prices dropped 11.90 (-0.43%) and finished at $2739.10 an ounce. Bitcoin (BTC) closed the session at $104.700.

The bulls were back in control as investors looked ahead to a less regulated and business friendly new administration. Despite this week's gains market participants were somewhat cautious, waiting on signs Trump's policies and threatened tariffs might be inflationary. While several of the Money Center banks closed the period at new highs after reporting earnings, investors will get a broader view of whether we'll see strong reports across the board next week, which could keep volatility elevated. The NYSE is closed on Monday for Martin Luther King Day.

Earnings releases to watch for on Tuesday include: KeyCorp (KEY), fifth Third Bancorp (FITB), 3M (MMM), Charles Schwab (SCHW), Netflix (NFLX), United Airlines (UAL) and Seagate Technology (STX).

Tuesday's Market Moving Economic Calendar: T-Bill Auctions.

By David L. Blake, CMT