VIDEO: Here Are the Next Earnings Reports That Can Impact Our Holdings
Next week will bring of sea of data, but first we have a wave of Portfolio earnings.
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In today’s Daily Rundown video, Chris Versace explains why the Fed’s decision to leave interest rates unchanged at its January policy decision was not a surprise.
Based on recent data, Chris explains why the Fed isn’t likely to deliver a rate cut at either of its next two policy meetings in March and May, but upcoming data in January and February will give more clues about potential policy moves at subsequent meetings.
Chris also lays out the Portfolio earnings reports we’ll be focusing on after Wednesday's market close and on Thursday morning, and explains why we’ll also be interested in results from Lam Research LRCX, Caterpillar CAT and Check Point Software CHKP.
Transcript
CHRIS VERSACE: Hey, everyone. Chris Versace here. We're coming off of Fed Chair Powell's post-policy press conference today, Wednesday, January 29. And as expected, the Fed left interest rates alone following delivering 100 basis points in cuts in the final four months of 2024.
Now, as we listen to Fed Chair Powell's message, it's pretty simple. The Fed is going to need to see more progress on a sustained basis towards the Fed's 2% target to deliver further rate cuts. During the conversation at the press conference, Fed Chair Powell did call out the core PCE being at 2.8% on a year over year basis in December. That kind of suggests that, as we know, the Fed is going to continue to watch not only that indicator, but also several others.
Bottom line, no change in that the Fed is going to want to see, as it likes to say, more good data. But as we've discussed with you in looking at the December CPI, PPI, and, more recently, the flash January PMI report, it doesn't look like we are getting more of that good data.
We'll have to revisit all of this next week. I say this because it is the start of February, and that means we have an avalanche of fresh economic data when it comes to the pace of job creation, inflation, and the speed of the overall economy. And yes, we will do what we do, update our thinking as that and other data in the coming weeks is published.
But based on what we've seen in recent months, I have to say, folks, it's hard to see the Fed delivering a rate cut at either its March or May policy meetings. When we think about the June policy meeting, well, the Fed will have about five more months of data, so we won't rule it out. But in our view, what we see in the upcoming January data and then in the February data, putting it all together, that will tell us much more about the probability of a rate cut towards the middle of 2025.
In terms of Powell's comments on Trump, Trump policies, tariffs, the Fed Chair did a very good job of kind of sidestepping any and all of that, really saying that he's not going to comment on what President Trump had to say about demanding lower interest rates and that the Fed will digest policy, whether it's tariffs, immigration, fiscal policy, what have you, as those announcements are made. So that means that we will continue to follow what is emanating out of Washington on those fronts.
I will say, on the tariff side, pretty interesting comment today from Secretary nominee Howard Lutnick saying that Canada and Mexico won't face tariffs if they address the flow of fentanyl into the US. We're not going to make any specific comments about that, other than to say it does appear that the situation is fluid, and it's going to bear watching closely, especially as we come up against that February 1 deadline that President Trump has been bandying about. So we will continue to watch closely, sharing our thoughts with you and updating things as needed.
With that, let's shift to what's going to happen after today's market close. It's going to be busy. Earnings for the portfolio are going to shift into arguably a much higher gear. We do have quarterly results from Meta, Microsoft, ServiceNow, Waste Management, and United Rentals. So it's going to be a busy afternoon. As I mentioned yesterday, for that reason, we are rescinding office hours today. We'll pick them back up next week. And we will have a lot of comments coming your way tomorrow morning.
Also, tomorrow morning, we will have earnings from Mastercard. And across today and tomorrow morning, we're also going to want to pay attention to comments from Lam Research as it relates to semi-cap demand. ASML had a very nice outlook today. But we will want confirmation from Lam Research tonight.
And then tomorrow morning, we'll also get quarterly results from Caterpillar and Check Point Software. With Caterpillar, what are they seeing on non-residential construction and infrastructure spending? On Check Point Software, we really want to hear them reiterate the positive comments on cybersecurity demand that we shared with you coming out of F5's quarterly results last night and its earnings conference call.
So with that, a busy upcoming 24 hours for the portfolio. So folks, please be sure to check your emails, your alerts. We want to make sure you're getting our latest thoughts. And if we make any moves with the portfolio, like the prudent register ringing we did today with the shares of Amazon and Morgan Stanley, well, we want to make sure that you are right there with us. Thanks for watching.
