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Market Update: S&P 500 Attempts to Break Losing Streak
This week on Wall Street, the S&P 500 was poised to end its five-day decline. Despite a robust rally on Friday, the index was still projected to close the week slightly lower. The rally saw broad-based gains across all sectors, with consumer discretionary leading the charge, largely attributed to Tesla’s recovery from a notable selloff earlier in the week. Notably, the information technology sector also showed strength, showcasing significant gains in semiconductors and software stocks. Meanwhile, the utilities sector continued its positive momentum as 2025 kicked off.
Sector Performance Highlights
On Friday, the materials, consumer staples, and financials sectors lagged behind the overall upward trend. One standout performer was Eaton, a power management company, which experienced nearly a 3% increase in its stock value during trading. RBC Capital raised its price target for Eaton from $374 to $392 per share, indicating an expected upside of 18% from its Thursday closing price of $331.96.
The strong performance of Eaton is supported by insights from the December manufacturing ISM report, which highlighted the electrical equipment, appliances, and components industry as a leading growth segment within manufacturing. Enhancements in new orders were noted by industry representatives, with one remarking, “The increase in new orders has our plant at full capacity.” This is a positive demand signal, reflecting healthy trends in the sector.
Demand Resurgence in the Utilities Sector
Eaton’s rally aligns with the overall strength observed in the utilities market, which represents a significant portion of the company’s sales. It is expected that as utilities ramp up their investments to accommodate rising power demands nationally, Eaton’s utility and grid solutions will become increasingly vital.
Looking Ahead: Key Events Next Week
As we move into next week, attention will turn to several crucial events. On Monday evening, Nvidia CEO Jensen Huang is set to deliver a keynote address at the Consumer Electronics Show in Las Vegas. Additionally, the minutes from the December Federal Open Market Committee (FOMC) meeting will be released on Wednesday at 2 p.m. ET. While these minutes are retrospective, market participants will likely analyze them closely, particularly regarding expectations for Federal Reserve interest rate cuts throughout 2025.
Wednesday after the market close will also see Jefferies Financial Group report its fourth-quarter earnings, an event that typically provides valuable insights into broader banking trends. Notably, the stock market will be closed on Thursday in remembrance of the late former President Jimmy Carter, who passed away at the age of 100.
Earnings Reports and Economic Indicators
The close of the week on Friday promises to be significant, with earnings reports expected from Constellation Brands, Walgreens Boots Alliance, and Delta Air Lines. Additionally, the much-anticipated December jobs report will be released, shedding light on employment trends as we move into the new year.
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Power management company Eaton in Pleasanton, California.
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