Stock Talk Weekly: Edition 7

Tristan Ramachandran

Jan 17, 2025

4 min read

Reviewing the Week of January 13th - 17th

Major Market Events:

📉 Stock Markets Decline for the Second Straight Week: Poor performance in the technology sector dragged the S&P 500 down 2.1% and Nasdaq 2.9%. Reserve Chair Jerome Powell repeated the central bank’s focus on the inflation rate–scaring investors of further interest rate hikes. Greater pressure on growth stocks following a 4.55% increase in the 10-year Treasury yield.

📈 Oil Prices Spike Amid Supply Concerns: OPEC+ teased production cuts for the near future. Soon after, WTI crude oil surged 4.7%, reaching prices as high as $88 per barrel. Rising tensions in the Middle East and North African oil export conflicts have created fear in the market–energy stocks such as ExxonMobil climbed 3.6% and Chevron 4.1%.

💰 Crypto Takes a Breather: Bitcoin has been rallying for weeks but recently dropped 7.5%. Investors began realizing their profits as Bitcoin wavered around the $100,000 marker. Ethereum followed suit, its value dropping 6.2%. Global central banks are fighting for tighter regulations concerning digital assets and coins, spreading negative investor sentiment throughout the market.

📊 Retail Sales Miss Expectations: A 0.4% drop in retail sales was anticipated as the holiday season concluded. However, retail sales exceeded the expected drop and declined 0.8%. Overinflated interest rates have been affecting consumer behavior–this resulting in lower revenues. The greatest declines were found in department stores.

This Week's Winners:

🟢 ExxonMobil (XOM): As oil prices surged, XOM shares increased 4.1%. The foreshadowed production cuts and the ongoing demand for oil well-positioned the company for success.

🟢 American Airlines (AAL): Strong forward guidance raises AAL shares by 6.8%. American Airlines announced the robust demand for their international travel services. The popularity of travel to Europe and Asia is driving the company’s positive outlook.

🟢 Taiwan Semiconductor Manufacturing Co. (TSM): NVIDIA and TSM have announced a partnership to manufacture advanced AI chips. Following the news, TSM stock surged 7.2%. Analysts expect the collaboration to drive TSM’s revenue for the remainder of 2025.

🟢 Procter & Gamble (PG): PG shares rose 5.3% by outperforming earnings expectations. The earnings results were driven by unusual demand for common household items. The climb in revenues was unexpected considering the challenging macroeconomic environment.

🟢 Rivian (RIVN): Rivian announced a record-breaking number of EV deliveries and improved profit margins all within the quarter. Following the good news, RIVN stock soared 9.1%. Additionally, the company formed a partnership with Amazon to access their electric delivery vans in Europe.

This Week's Losers:

🔴 Microsoft (MSFT): Dwindling demand for Microsoft’s cloud services caused shares to tumble 4.6%. Slowing demand and stricter IT budgets have investors skeptical about the technology sector.

🔴 Ford (F): Ford shares dropped 5.9% after the company adjusted its EV production estimates to target smaller numbers for 2025. Supply chain constraints are limiting Ford’s production capacity and the consumer demand is becoming progressively weaker.

🔴 Netflix (NFLX): Netflix’s latest earnings report reflected weak subscriber growth, yielding a 6.4% loss in share value. The development of AI has introduced countless substitutes to the streaming market–the increased competition and costs for producing content have impacted investor sentiment.

🔴 Coinbase (COIN): Coinbase shares suffered a 5.7% decline as regulatory pressure has worsened. The company’s long-term outlook wavers as investors are concerned about reduced staking services and declining trading volumes.

🔴 3M (MMM): The legal challenges associated with the PFAS lawsuit sank 3M shares by 4.2%. Negative investor sentiment arises from unclear settlement amounts and liabilities.

Upcoming Events:

📅 Federal Reserve Commentary (January 18th): The World Economic Forum in Davos is set to feature Fed Chair Powell. The markets will be on standby, waiting for new insight into the central bank’s interest rate and economic outlook.

🎯 Tech Earnings Season Begins: Major technology firms are scheduled to report quarterly results this week. Investors are keeping an eye out for Netflix and Intel. Additionally, analysts focused on high-growth companies' reactions to heightened interest rates and strict corporate budgets.

🎯 Oil Market Outlook: The attention shifts to major oil suppliers and inventory data as OPEC+ hints towards production cuts.

Next Week's Watchlist:

⭐ Microsoft (MSFT): Weak guidance from the previous week leaves investors impatient for updates on Microsoft’s AI and cloud business. Investors lose confidence while awaiting the announcement of new products or partnerships.

⭐ Tesla (TSLA): Updates on the Cybertruck launch and global EV demand make Tesla a hot topic for the week. Guidance for the company’s 2025 deliveries will also be in focus.

⭐ UnitedHealth Group (UNH): UnitedHealth is scheduled to report earnings this week. Investors are eager to assess the performance of the health insurance market despite rising healthcare costs.

⭐ Delta Airlines (DAL): American Airlines, another major airline, recently received strong guidance. Investors have their sights on Delta Airlines because its results will determine the condition of the airline sector.

⭐ Bank of America (BAC): BAC’s earnings report will showcase the banking sector’s resilience to inflated interest rates. The focus will be geared towards loan growth, net interest margins, and credit quality.