Weekly Roundup: Trump Trading Turbulence Fades, But Big Earnings Await
We bulked up on two holdings, discussed where we’d add again, and identified one name we may trim, as we ready for results from eight positions.
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While it was an abbreviated trading week, if you’re like us, it sure felt like a longer-than-usual one. The week was a volatile one, but our message to you on Monday to let things play out and not react with a hair trigger to President Trump’s bombastic comments about Greenland proved to be the smart play.
As we learned on Wednesday and Friday, Trump not only agreed not to use military force regarding Greenland, a deal framework was struck, and the president walked back incremental tariffs slated for February 1. The net effect saw the S&P 500 close the week down modestly, but if we only looked at the week-to-week move, that wouldn’t show the sharp selloff on Tuesday and the recovered ground on Wednesday and Thursday.
With Greenland uncertainty seemingly off the table, at least until we see Trump rattle the next cage next, what we have ahead of us is the steep ramp in December-quarter earnings over the next two weeks and the Fed’s policy decision next week. It also appears the folks in Washington are on track to deliver a deal to avert another government shutdown, but to be sure, we’ll need to keep an eye on the Senate when it votes on the bills next week.
With the market not expecting much out of the Fed next week and because we have a rather ho-hum economic calendar for the last week of January, the market’s focus, and therefore ours, will be on the sea of earnings reports. We’ve been vocal about our view that, because of the market’s valuation, for the S&P 500 to power meaningfully higher, we will need to see at least confirmation that the expected 14%+ EPS growth for the S&P 500 basket is attainable. To the extent that the aggregate picture is better than that, so much the better.
As we discuss below, we have eight holdings reporting next week between Wednesday and Friday. For that reason, we will be watching the market’s reaction to earnings results on Monday and Tuesday very closely. What we’ll be watching for is how an earnings miss, in-line results, or a beat relative to consensus expectations for the December quarter and forward guidance are viewed by the market. That will tell us what we can expect, subject to what our companies deliver next week, and that will enable us to be prepared.
At the end of next week, we have the January Monthly Roundup, which means a detailed discussion for each of the Portfolio’s 25 individual stock positions and some words on the EPS Diplomats model. As you’ll read below, so far, that new basket of eight stocks is performing like a champ.
Enjoy your weekend, Saturday’s Signals alert, and Sunday’s bowl of "soup." See you back here, bright and early on Monday. And if you’re in the path of this massive winter storm, be careful.
Catching Up on the Portfolio This Week
As we discussed above, the week was a volatile one for the market, and that goes for the Portfolio as well. Like the S&P 500, when all was said and done about Trump, Greenland, and Davos, we had a modest setback.
The rubber will hit the road next week as earnings season heats up, and we should see a number of confirming data points. We’ll note the nice rebound in some of our positions, such as ServiceNow (NOW) and Microsoft (MSFT) , as well as the pops in shares of Meta (META) and Arista Networks (ANET) . What that tells us is that ignoring the market noise and focusing on the data, fundamentals, and signals will keep us on the path we want to be on.
Looking at the current basket that comprises our EPS Diplomats strategy, with five trading days to go in January, the group is up more than 10%, a rather fine showing compared to the S&P 500’s year-to-date performance. This argues for us potentially making the EPS Diplomats a larger part of the Portfolio when we reconstitute it next on April 1.
After picking up some additional ServiceNow shares at $129.94, this week we bulked up the Portfolio’s exposure to Broadcom (AVGO) and Palantir (PLTR) . In Friday’s video, we outlined what we’re watching given the drift lower in AVGO shares and what could spur us to pick up more.
When we made those trades, we explained that we are inclined to review our Two rating on Bank of America (BAC) given the recent pullback, but we’re likely not going to make any adjustments until we see what happens on the credit card cap front. We also shared with you that if the Costco (COST) shares moved deeper into an overbought condition, some prudent profit-taking may be called for after the rocket ship-like ride in the stock over the last few weeks.
Closing out the week, the Portfolio’s cash level stood at ~7.6% of its assets, but we have many dividend payments from our holdings approaching. Marvell (MRVL) will pay its next quarterly dividend next week, and in February, we should be receiving dividends from American Express (AXP) , Costco, and Morgan Stanley (MS) . We are continuing to evaluate a smart place to pick up more Welltower (WELL) shares, but we’re also grinding away at some new ideas as well. Stay tuned.
Now let’s see what others on Wall Street had to say about the Portfolio’s holdings during this shortened but electric week for the market:
Tuesday: Citi trimmed its Apple (AAPL) price target to $315 from $330, but Evercore ISI added the shares to its “Tactical Outperform” list, reiterating its $330 target. UBS increased its Alphabet (GOOGL) target to $345 from $306, citing its view for an acceleration in the company’s business, but also reduced its Meta price target to $830 from $915.
Deutsche Bank also boosted its Alphabet target, taking it to $370 from $340. TD Cowen trimmed its Microsoft target to $625 from $655 amid concerns that capacity constraints could keep the shares rangebound near-term. TD also lowered its ServiceNow target to $200 from $230, but calls for a nice beat for remaining performance obligations. Morgan Stanley increased its price target for American Express to $395 from $370.
Wednesday: Mizuho trimmed its price targets for Microsoft and ServiceNow to $620 and $190, respectively, from $640 and $210. Despite those reductions, Mizuho finds AI adoption “very strong.”
Thursday: Phillip Securities initiated coverage on Palantir with a Buy rating and a $208 target. Raymond James slapped a Strong Buy rating on Alphabet shares, and hiked its target to $400 from $315. BTIG reiterated its Buy rating and $200 target for ServiceNow, sharing that it “continues to see strong traction with Now Assist among its larger customers.”
Friday: Wells Fargo boosted its price target for United Rentals (URI) to $1,071 from $995, and took its Waste Management target to $246 from $238.
This Week's Portfolio Videos
We cover a lot of ground during the week in our Daily Rundowns. If you happened to miss one or more of them, here are some helpful links:
Tuesday, January 20: Our Game Plan as Trump Threats Rekindle Trade Concerns
Wednesday, January 21: Trump May Not Use Force for Greenland, But He Has Other Tools
Thursday, January 22: Trump’s Deescalates Tension Before Big Tech Wave
Friday, January 23: Laying Out Our Game Plan Ahead of a Big Week of Earnings
Key Global Economic Readings
(Note: T is the most recent period, T-1 is the prior period's reading, and T-2 is two periods back, the intent being to illustrate any trends.)
Chart of the Week: iShares Russell 2000 ETF (IWM)
Sometimes a chart can look so good that it could turn out bad. Now, before you start thinking we’re crazy here, let me explain.
A nice, trending-up move in a stock or index is what we consider bullish, and confirmation of breakouts is also bullish. But stocks do not have a "speed limit" function or GPS, so they can often go up much further than anyone expects, and then suddenly you’re faced with a decision: Should I stay or should I go?
No question, the Russell 2000 ETF (IWM) has been the dominant player since around Thanksgiving. Kudos to the small-caps, which severely underperformed the rest of the market for nearly 10 months in 2025 before finally getting it together. For this young new year of 2026, the IWM has clearly dominated all other indexes.
But we must be wary of overbought conditions and their relevance to the future. Stocks and indexes can remain overbought for quite a long time, but the odds favor that condition to eventually burn off and offer new buying opportunities to the waiting dip buyers.
While there is clearly nothing wrong with the small-cap chart of the Russell 2000 ETF, there is a candle printed that has a long history of calling a top. We don’t like to call tops in markets, that is typically a loser’s game. But seeing that reversal candle at the top and closing nearly the lows of the session after a gap higher tells us one thing: Buyers are not that interested in taking this index higher.
Money flow is strong; the relative strength index (RSI) is about maxed out, and the moving average convergence divergence (MACD) is on a solid buy signal.
At some point, the buying is going to stop, and the sellers will take over. We can note the distance away from key moving averages like the 20-day and 50-day moving averages (dotted and purple line), so a reset could be in order (back to those levels). Recall the drop in December by the IWM, a nasty fall to the 50-day moving average that held the index firm after stalling out. Can it happen again?
With the Russell 2000 up a stunning 9.6% in January and only a handful of trading days left in the month, this is setting up for some selling on the near-term horizon.
Other charts we shared with you this week were:
Tuesday, January 20: S&P 500 - Big Earnings Week Raises Questions About Late 2025 Rally
Tuesday, January 20: Palantir (PLTR) – Trouble Ahead for Palantir?
Wednesday, January 21: Marvell (MRVL) - Marvell Pulls Back to a Familiar Spot
Thursday, January 22: Apple (AAPL) - Can Apple Get It Together?
The Week Ahead
If you’re dealing with the severe winter weather and snow this weekend, do what you have to do, but don’t overdo it. We have a very busy week ahead for the market and the Portfolio. What is revealed when some key components of the S&P 500 deliver their December-quarter results, and their first look at 2026 expectations mean it could be a pivotal one for the market.
But first things first, we have a modicum of economic data next week, with a few catch-up pieces on the way. Ahead of the Fed’s monetary policy decision on Wednesday afternoon, January 28, there aren’t really any new data points that will likely sway the outcome. After delivering three 25 basis-point rate cuts in the last quarter of 2025, the market does not expect the Fed to deliver another one next week.
Hammering that home was what we saw in the October and November core PCE price index data reported this past week, as well as Friday’s Flash January PMI report from S&P Global. We suspect Fed Chair Powell will trot out the very familiar “follow the data” line, and as we discussed on Friday, there are reasons to, especially if we see a ramp-up in corporate job cuts.
Here's a closer look at the economic data coming at us next week:
U.S.
Monday, January 26
Durable Orders – November (8:30 AM ET)
Tuesday, January 27
ADP Employment Change Report (Weekly) – (8:15 AM ET)
FHFA Housing Price Index – November (9:00 AM ET)
S&P Case-Shiller Home Price Index – November (9:00 AM ET)
Consumer Confidence – January (10:00 AM ET)
New Home Sales – December (10:00 AM ET)
Wednesday, January 28
MBA Mortgage Applications Index – Weekly (7:00 AM ET)
Retail & Wholesale Inventories (Advanced) – December (8:30 AM ET)
Durable Orders – December (8:30 AM ET)
EIA Crude Oil Inventories – Weekly (10:30 AM ET)
Fed Policy Decision (2 PM ET)
Thursday, January 29
Initial & Continuing Jobless Claims – Weekly (8:30 AM ET)
Factory Orders – November (10:00 AM ET)
EIA Natural Gas Inventories – Weekly (10:30 AM ET)
Friday, January 30
Producer Price Index – December (8:30 AM ET)
International
Monday, January 26
Japan: Leading Indicators – November
Germany: Ifo Business Climate – January
Tuesday, January 27
China: Industrial Profits – December
Eurozone: New car registration - December
Wednesday, January 28
Germany: GfK Consumer Confidence – February
Canada: Bank of Canada Interest Rate Decision
Thursday, January 29
Japan: Consumer Confidence – January
Eurozone: Economic Sentiment, Consumer Confidence - January
Friday, January 30
Japan: Industrial Production, Retail Sales – December
Germany: Import/Export Prices – December
Germany: GDP (Flash) – Q4 2025
Eurozone: GDP (Flash) – Q4 2025
Getting back to the big earnings ahead of us, as you can see in the chart above, 32% of the S&P 500 will be reporting next week. Among that bunch are eight Pro Portfolio holdings, including Apple (AAPL) , Amazon (AMZN) , Microsoft (MSFT) , Meta (META) , ServiceNow (NOW) , United Rentals (URI) , Waste Management (WM) , and American Express (AXP) . We’ll be previewing what we expect from those reports, and as we get them, we will review corresponding price targets and, if need be, Portfolio ratings.
In addition to those eight holdings, what is said next week about 2026 capital spending levels by Meta, Microsoft, and Amazon will determine how shares of Nvidia (NVDA) , Broadcom (AVGO) , Marvell (MRVL) , and Arista Networks (ANET) trade. Based on the signals and other data points about rising AI adoption and growing usage in the enterprise and among consumers, we are likely to see another step up in capex levels.
How large that turns out to be will be a determining factor for the market’s performance next week. Either way, we will continue to follow the fundamentals and signals, while keeping an eye on the technicals. And let’s keep in mind that the larger capex picture won’t be filled in until Alphabet (GOOGL) reports on February 4.
Those reports will keep us pretty busy, but we will still aim to connect as many dots as possible from the sea of other company earnings. Some of the things we’ll be looking out for are AI adoption and usage, layoffs, margins, productivity gains, capital spending levels, and the like.
Here's a closer look at the earnings reports coming at us next week:
Monday, January 26
Open: Steel Dynamics (STLD)
Close: Celestica (CLS), Crane (CR), Nucor (NUE)
Tuesday, January 27
Open: American Airlines (AAL), Applied Industrial (AIT), Boeing (BA), HCA (HCA), JetBlue (JBLU), Kimberly-Clark (KMB), NextEra Energy (NEE), Northrop Grumman (NOC), Sysco (SYY), Union Pacific (UNP), United Parcel Service (UPS)
Close: F5 Networks (FFIV), Qorvo (QRVO), Texas Instruments (TXN)
Wednesday, January 28
Open: ASML (ASML), AT&T (T), Corning (GLW), Danaher (DHR), Extreme Networks (EXTR), General Dynamics (GD), M/I Homes (MHO), MSCI (MSCI), Starbucks (SBUX), Textron (TST), VF Corp. (VFC)
Close: IBM (IBM), Lam Research (LRCX), Lending Club (LC), Meta Platforms (META), Microsoft (MSFT), ServiceNow (NOW), Tesla (TSLA), United Rentals (URI), Waste Management (WM), Whirlpool (WHR)
Thursday, January 29
Open: Altria (MO), Ameriprise Financial (AMP), Blackstone (BX), Caterpillar (CAT), Comcast (CMCSA), Eagle Materials (EXP), Honeywell (HON), Lazard (LAZ), Lockheed Martin (LMT), Mastercard (MA), Parker-Hannifin (PH), PulteGroup (PHM), SAP SE (SAP), Sherwin-Williams (SHW)
Close: Amazon (AMZN), Apple (AAPL), Beazer Homes (BZH), Hologic (HOLX), KLA Corp. (KLAC), Visa (V)
Friday, January 30
Open: American Express (AXP), Chevron (CVX), Colgate-Palmolive (CL), Exxon-Mobil (XOM), SoFi Technologies (SOFI), Verizon (VZ)
Portfolio Investor Resource Guide
Economic Data: Here's a List of Links to the Key Economic Data We Closely Watch
Investing Terminology: 16 Key Terms Club Members Should Know
10-Ks: Want to Know About a Stock? Read the Company's Reports
10-Qs: Unlock the Numbers and Key Information Behind Your Stock With the 10-Q
Income Statement: Our Cheat Sheet to Understanding This Financial Document
Balance Sheet, Cash Flow Statements, and Dividends: How to Know If a Company Is Off-Kilter? Read Its Balance Sheet
Valuation Metrics: Everyone Wants a Value. Here's How Investors Can Find
Thematic Investing 101 Webinar
Like the Benefits of ETFs? Let’s Talk About Models
The Portfolio Ratings System
1 - Buy Now (BN): Stocks that look compelling to buy right now.
2 - Stockpile (SP): Positions we would add to on pullbacks or a successful test of technical support levels.
3 - Holding Pattern (HP): Stocks we are holding as we wait for a fresh catalyst to make our next move.
4 - Sell (S): Positions we intend to exit.
Stocks & Markets Podcast Links
Some helpful links if you prefer to catch the podcast on the go, in the car, or wherever. Be sure to give it a like or thumbs up and leave a review if you’re so inclined. We’d appreciate it.
