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A huge week of earnings and the Federal Reserve meeting on January 30-31 will dominate the action during the week. The list of tech heavyweights due to report includes Apple (AAPL) (analysis), Amazon (AMZN) (preview), Microsoft (MSFT) (preview), Alphabet (GOOG), and AMD (AMD) (preview). Boeing (NYSE:BA) is also reporting earnings next week during a turbulent time for the aircraft manufacturer.
The Federal Reserve is largely expected to hold interest rates steady and make only a subtle change to the policy statement, but the Jerome Powell presser will be closely watched for any hawkish or dovish tilt. Seeking Alpha analyst Chris Lau thinks the Fed will discuss extensively the merits of cutting interest rates against the risk of future inflation, which has yet to fall to the 2.0% target. At the end of the week, the spotlight will turn to the U.S. jobs report. Even with all the major events taking place, Tesla (TSLA) is likely to generate plenty of noise once again as investors and analysts weigh the premium valuation in light of the lowered unit volume expectations.
Earnings spotlight: Monday January 29 – Whirlpool (WHR) and Nucor (NUE).
Earnings spotlight: Tuesday, January 30 – General Motors (NYSE:GM), United Parcel Service (UPS), Sysco (SYY), Pfizer (PFE), Alphabet (GOOG), Microsoft (MSFT), Starbucks (SBUX), Mondelez International (MDLZ), and Advanced Micro Devices (AMD).
Earnings spotlight: Wednesday, January 31 – Phillips 66 (PSX), Boeing (BA), Mastercard (MA), MetLife (MET), Qualcomm (QCOM), and Boeing (BA).
Earnings spotlight: Thursday, February 1 – Merck (MRK), Honeywell (HON), Altria (MO), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Royal Caribbean Cruises (RCL), and Post Holdings (POST).
Earnings spotlight: Friday, February 2 – Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), and Charter Communications (CHTR).
Volatility watch: Options trading volume is elevated on Spirit Airlines (SAVE) as traders gauge the impact of the DOJ blocking the merger with JetBlue Airways (JBLU). ProKidney Corp. (PROK) and Fisker (FSR) both have an elevated level of short interest outstanding on them ahead of the earnings season. The most overbought stocks per their 14-day Relative Strength Index include Dave (DAVE), Kaman (KAMN), and RayzeBio (RYZB). The most oversold stocks per their 14-day Relative Strength Index include reAlpha Tech (AIRE), Archer-Daniels-Midland (ADM), and Alternus Clean Energy (ALCE).
IPO watch: Amer Sports (AS) will start trading next week. The sports equipment maker is aiming to sell 100M shares in a range of $16 to $18 targeting, which is a level that could value the firm at as much as $10B. That is smaller than sporting goods retailer DICK’S Sporting Goods’ (DKS) market cap of $12.5B, but well above the market caps for sports-related companies such as Under Armour (UAA), Academy Sports and Outdoors (ASO) and Topgolf Callaway Brands (MODG). The Finland-based company owns iconic sports and outdoor brands that include Arc’teryx, Salomon, Wilson, Atomic, Louisville Slugger, and Peak Performance. Meanwhile, companies with blocks of shares rolling off their IPO lockup period next week include Vinci Partners Investments (VINP), Pixie Dust Technologies (PXDT), Hanryu Holdings (HRYU), Brera Holdings (BREA), Cheetah Net Supply Chain Service (CTNT), and MIRA Pharmaceuticals (MIRA).
Dividend watch: Companies forecast to increase their quarterly dividend payouts include General Motors (GM) to $0.12 from $0.09, Old Dominion Freight Line (ODFL) to $0.50 from $0.40, Moody’s (MCO) to $0.85 from $0.77, Oshkosh (OSK) to $0.45 from $0.41, and Piper Sandler (PIPR) to $0.65 from $0.60.
FOMC preview: The Federal Reserve Open Market Committee meeting is scheduled for January 30-31. Economists expect the Fed to stand pat on rates and only make very subtle changes to the policy statement. Morgan Stanley noted that the rotation of FOMC voters now tilts a bit less favorable for an early cut. The expectation is that most of the discussion will center on inflation, the path for rates ahead, and the Fed’s balance sheet. Heading into the market, economic growth has slowed, labor markets have cooled, and inflation has peeled off without any huge increase in unemployment. Bank of America thinks it is hard to argue against the conclusion that substantial progress has been made in returning inflation to the 2% target, while keeping employment near maximum levels. According to the firm, the real questions are whether trends in the data can be sustained, and if disinflation driven by falling goods prices is enough to give the Fed confidence that it has won the battle on inflation. The Fed may also accelerate its discussion about when and how it should slow the pace of securities runoff from its balance sheet. BNP Paribas thinks there could be a last gasp of a tightening bias in the statement. On Seeking Alpha, analyst Damir Tokic noted that the Fed has signaled an additional four rate cuts for 2025, or seven in total, while the market expects three cuts in 2025, or eight in total. Tokic believes that the Fed is likely to drop the reference to “any additional policy firming” in the official statement, but not yet mention “policy easing.”
Auto watch: The automobile sector could have another rough week as January sales reports roll in. Auto sales are forecast to decelerate from the quickening pace realized in December, with demand seen falling back to a SAAR of 15.2M units. S&P Global said that contributors to the slower January sales pace include an expected hangover from the solid closeout to sales in December, combined with some inclement weather effects. S&P Global Mobility projects 2024 volume of 15.94M units to mark a 3% increase from the 2023 tally. “Auto consumers continue to be impacted by an uncertain purchase environment. While positive developments regarding mildly retreating vehicle prices, rising inventory and incentive levels bode well, interest rates remain high and economic headwinds remain.” noted S&P analyst Chris Hopson. General Motors heads into its earnings report on January 30 with a streak of four straight double (revenue, EPS) beats in play. It also could be another choppy week for electric vehicle stocks after Tesla’s warning on a slower unit volume growth rate this year rattled the sector. At the end of the week, the annual National Automobile Dealers Association Show in Las Vegas could attract attention.
Investor events: Baker Hughes (NASDAQ:BKR) will holds its annual meeting in Florence, Italy on January 29. The list of speakers includes top Baker Hughes executives, representatives from Saudi Aramco (ARMCO), and the Saudi energy minister. Texas Instruments (TXN) will host a capital management review event on February 1. Shares of TXN have been volatile in the past when the event was held. Flutter Entertainment’s (OTCPK:PDYPY) U.S. listing is expected to start trading next week with the symbol FLUT. Following the U.S. listing, Flutter (OTCPK:PDYPY) will remain an Irish incorporated public limited company and still have its headquarters at its current base in Dublin, Ireland. Flutter (OTCPK:PDYPY) shares will continue to be listed on the London Stock Exchange, while the secondary listing on Euronext Dublin will be cancelled.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
