The First Slice for Monday, January 13, 2025

Earnings, Inflation, and the Fed: A High-Stakes Week for Markets

This week, Wall Street is on high alert as major banks—including JPMorgan Chase, Goldman Sachs, and Bank of America—report their latest earnings. Investors will be watching closely to see if these financial giants can maintain their momentum after a strong third quarter, especially as they continue expanding their investment banking and wealth management divisions. But it’s not just the banks in the spotlight—tech and healthcare companies like Taiwan Semiconductor Manufacturing Company (TSMC) and UnitedHealth Group are also set to reveal their numbers, offering insights into their industries’ health.

Adding to the excitement, Wednesday’s Consumer Price Index (CPI) report will give a fresh update on inflation. With grocery prices recently seeing their biggest jump in nearly two years, economists are eager to see whether inflation remains “sticky” or if price pressures are easing. Meanwhile, the Producer Price Index (PPI) and retail sales data will shed light on wholesale costs and consumer spending trends—two key indicators of economic strength. November’s retail sales surprised analysts with a 0.7% jump, fueled largely by car purchases, and many are wondering if this trend continued through the holiday season.

Beyond earnings and inflation, the Federal Reserve is set to make some noise before its upcoming policy meeting at the end of the month. Several top Fed officials, including New York Fed President John Williams and Chicago Fed President Austan Goolsbee, are scheduled to speak this week. Investors will be hanging on every word, hoping for clues about potential interest rate moves. The Fed’s upcoming “blackout period” starts Friday, meaning this is the last chance for central bank officials to shape market expectations before the decision-making process kicks into high gear……. [read more]