Earnings Season and the CPI’s Impact on Stocks
This week has already brought in a fair share of ups and downs. The volatility index had a -17% range between Monday and Tuesday, the S&P 500 had a near 1% intraday reversal on Monday, and the Dow Jones Industrial Average is trying to reclaim its 10-day moving average after dropping over -1.4% last Friday. Are the markets heading for new highs or bracing for turbulence? Let’s unpack the key drivers and set the stage for what’s ahead.
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We continued our winning streak last week, closing four profitable trades for a combined $916 in cash despite the broader market sell-off.
As the major indices plummeted on Friday, one of the stocks we were trading surged more than 25% on news of an acquisition that could make it the country’s largest clean energy provider.
Let’s take a closer look.
Is The Market Ready To Break?
The latest job data will likely influence the Federal Reserve’s approach to interest rates in the months ahead. Alongside this, the Consumer Price Index (CPI) report, set for release shortly thereafter, will play a crucial role in shaping the economic landscape, possibly marking a decisive moment in the Fed’s fight against inflation.
Is the Economy Too Strong?
With a shortened trading week following the funeral of President Jimmy Carter, the market has had less time to digest economic reports, creating wild swings as bulls and bears grapple over what’s next. The S&P 500 enjoyed a two-day rally before bond yields surged, dragging stocks down. What did the data show, and what might it mean moving forward?
Your Weekly Income Report
We closed 13 winning trades last week across all our services, booking nearly $5,150 in cash in the live account despite the holiday-shortened week.
This included four credit spreads from the Income Masters program that allowed members to pocket $1,150 in cash in the first two trading days of the year. But last week’s standout trade resulted in a profit bigger than all our other winning options trades combined.
Let’s take a closer look at it.
A Not-So-Happy New Year
The Santa Clause Rally already happened in November as December put up the second-to-worst month of S&P 500 returns for the entire year. Even Thursday’s return to trading started strong only to suffer from a mid-day reversal and now investors are left trying to figure out if the bull run can continue. What sectors could help this sluggish bull market kick into high gear in the new year?
Your Weekly Income Report
We closed seven winning trades last week across all our services, booking $1,760 in cash in the live account despite the holiday-shortened week.
This included three holiday cash trades from our Millionaire’s Trading Club VIP live trading event on Dec. 20. It also included the final trade from our latest round of Income Madness, which saw us net more than $2,800 in cash in just over a month.
This week, we take a closer look at that final trade.
The January Effect
While a lot has been written about the Santa Clause Rally, I thought I’d spend a brief amount of time writing about what happens afterwards – also known as the January Effect. Tax-harvesting in December can create unique opportunities in certain stocks and sectors in January.
Your Weekly Income Report
Last week’s most-profitable trade saw Income Masters members pocket $1,300 in cash for a nearly 11% return in just 19 days. And while we booked more than 80% of the max profit on this one, a few wondered why we didn’t hold on for more.
Find out why we were comfortable closing early and what would have happened had we held on a few more days.
What To Expect From Markets In 2025
The short answer is that 2025 will bring a market where investors must clear an even higher bar to keep the momentum going. Will stocks be able to rally again? That depends on big factors like economic growth, the Fed’s next moves, corporate earnings, and geopolitics. The answers to these questions could make or break the market’s momentum. However, the challenge for bulls is clear: After the optimistic rally of 2023 and the partial fulfillment of hopes in 2024, surpassing expectations in 2025 will require even stronger outcomes.
