Author: Zac Martin, Investment Associate
Week Ending January 30th – Warsh-ed Up
Federal Reserve Update: The first FOMC Meeting of the year was relatively uneventful with the S&P 500 closing down by only 0.01%. The committee decided to leave the Federal Funds Rate unchanged at 3.5-3.75%. Two members voted against this action, preferring that the committee lower rates by 0.25%. Additionally, President Trump announced Kevin Warsh as his pick for the next Fed Chair, who is likely to succeed Powell in May once he is confirmed by the Senate. This announcement possibly contributed to a strengthening dollar as well as a 10% & 30% drop in Gold and Silver, respectively.
Earnings Update: The reporting period for Q4 2025 is 33% done, and so far, 75% of companies that reported are beating their earnings estimates. This is slightly below the 5-year average of 78%, however, the S&P 500’s blended net profit margin is expected to be 13.2%, which is an all-time high since FactSet started tracking it in 2009. Additionally, several Mag 7 companies reported, and results were generally above the estimates. However, not all Mag 7 stocks moved higher following the results. AI related return on investment continues to be a large talking point for companies and analysts as expected CapEx continues to increase.
The Week Ahead:
- ISM PMIs
- JOLTS Report (2/3)
- Nonfarm Payrolls & Unemployment Rate (2/6): Payrolls est: 80k & Unemployment Rate est: 4.4%
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