VIDEO: Trump Returns and Earnings Season Can Shape These Four Holdings

In today’s Daily Rundown video, Chris Versace shares the Portfolio roadmap for the week, which begins with digesting the initial wave of policy moves from President Trump and gathering responses from world leaders at the World Economic Forum in Davos. To that, we’ll mix in reactions and potential implications from companies reporting their quarterly results this week and in the coming ones. 

Chris discusses the earnings reports we’ll be focused on this week with an eye toward our positions in American Express AXP, Mastercard MA, Trade Desk TTD and Waste Management WM. 

We also explain how we’ll be mining this week’s reports from Procter & Gamble PG, Union Pacific UNP and CSX CSX.  

Transcript

CHRIS VERSACE: Hey, everyone, January 21, Tuesday. Chris Versace here. And if you saw our poll last week, we postulated that inauguration day and President Trump's inauguration address could be potentially meaningful for the markets. And, well, we weren't let down, I'm afraid.

As you probably saw yesterday, yes, the pomp and circumstance associated with the new president taking office. But as we learned throughout the afternoon into the evening and still early this morning, the president put a number of executive orders to action. Everything from return to work for federal employees to declaring a national energy emergency and much more.

And today and the next several days, I think the market is going to digest exactly what those potential executive orders mean and the policy implications, but also whether or not some of them will be, well, let's just face it, facing resistance and in some case, potential legal action. So I think that the initial response is going to be somewhat muted until we have a clearer sense of what is happening.

But there are other things outside of those that are likely to jostle the markets. For example, President Trump saying last night that he's contemplating 25% tariffs on Mexico and China effective February 1. Now, what makes this rather interesting, and we talked about this last week, is that we now have the World Economic Forum in Davos kicking off and that will span the next several days. So it'll be interesting for us to, on the one hand, dig through and ponder the implications of these Trump executive orders, but also we want to be mindful of what world economic leaders, business leaders have to say about Davos in response to these executive orders and their implications.

At the same time, we're also going to want to pay close attention to what companies have to say. And to some respect, there's no better time to do that. Why? Because the December quarter earnings season continues today and accelerates not only through this week, but over the next few as well.

So in addition to mining for comments about the December quarter, updated comments about the consumer, AI, and a host of other things that relate to our portfolio holdings, we're also going to be listening to management teams' comments about these potential Trump policies, what may be positive for their businesses, what might be headwinds for their businesses, and how they might be addressing the near term uncertainty.

So it's going to be busy, busy, busy. But let's just quickly review some of the earnings that are coming out this week, what we'll be paying attention to, and of course, what is that one key economic data point late this week that we'll be paying attention to. So on the earnings docket-- let me just get my notes here-- today, we've got Logitech, Netflix, and United Airlines.

Now with Logitech, what are they saying about PC rebound? That market is, as we saw last year, starting to take off. It's expected to continue with AI PCs becoming a more meaningful percentage. We'll want to hear what Logitech has to say.

With Netflix, our big concern here is the adoption of the advertising business model. Why? Because that has potential implications for our position in trade desk.

And then with United Airlines today, what is the outlook for spending on air travel and just travel in general? We'll be eyeing that as it relates to American Express in the portfolio, as well as Mastercard. Thursday, we'll also be comparing and contrasting United's comments with those from Alaska Airlines and, of course, American Airlines.

Tomorrow, Wednesday, we have Proctor & Gamble. We also have Discover Financial Services and then Waste Connections. With Proctor & Gamble, what's the impact of not only pricing, but what are they saying about the dollar? Discover Financial Services, where are consumers spending? Are they continuing to spend? This will help set the table for quarterly results from American Express on Friday.

And then Waste Connections, this is a smaller waste company compared to Waste Management. But what are they seeing in terms of overall economic activity and pricing? And what does that mean for their margins? That will help set the table for when Waste Management reports in the coming weeks.

Thursday, I already mentioned, we have Alaska Airlines, American Airlines, but we're also going to have two railroads, UNP and CSX. What are they seeing in terms of the pace of the economy? Remember that as things move around, it's a barometer of economic activity. So we always like to watch and pay attention to what the rails have to say, as well as what trucking companies have to say.

So we'll get some of that feedback on Thursday. We will be looking for confirmation that there might be a little bit of an upturn in the manufacturing economy. And then on Friday, as I mentioned, we do have American Express reporting. But on Friday, we will also get the one, what I would argue, is big data point from an economic perspective. That is the Flash January PMI.

Now, when we dig through this, like we always do, we are going to be mindful of the headline figure, but we also want to pay attention to new orders, employment, and what the report has to say about pricing. Last week and the week before, we did see some positive indications on the inflation front. But as we've talked about, one month of data is not going to do it.

So we're going to have to continue to dig through the data. If we continue to get more improvement on the inflation front, that will be a positive. The market could, over a span of several months of similar data, rewarm to the potential of additional Fed rate cuts in 2025. Remember right now, we only have one.

And as it relates to the Fed, we have no Fed speakers this week, because we are in the quiet period ahead of next week's policy meeting. The Fed is not expected to do anything at that policy meeting, in terms of rate cuts. But we will want to be paying close attention for a few reasons.

One, as we've talked about, there is a new Federal Open Market Committee that skews a little more hawkish than we saw in 2024. Second, we did get some good inflation readings recently. How does the Fed see that? And we'll look for signs for what they might want to see in terms of future rate cuts. My thinking, as I already shared, is going to be several months of continued sustained improvement moving closer toward the Fed's 2% target.

So that's kind of our roadmap for this week. We are going to share an updated table of earnings expectations, panic points, and potential pickup points for the portfolio with you. And then also today, we will be sharing some more thoughts on these Trump policies.

Remember, we're always going to be contemplating the potential impacts on the market, on the portfolio with an eye towards the long term. So my friends, please be sure to check your emails and alerts not only today, but throughout the week. It's going to get increasingly busy. And if we make any moves with the portfolio, we want you right there with us. Thanks for watching.

At the time of publication, TheStreet Pro Portfolio was long AXP, MA, TTD and WM.