The First Slice for Monday, January 6, 2025

Markets Pause for Reflection as Economic Data Rolls In

This week, the financial world takes a step back as the stock market and federal agencies close on Thursday for a national day of mourning in honor of former President Jimmy Carter. With some bond markets shutting early, economic data releases and corporate earnings reports have shuffled around to accommodate the memorial. But don’t let the brief pause fool you—investors, policymakers, and analysts still have a jam-packed schedule to navigate.

One of the most anticipated reports will drop on Friday: the December U.S. jobs report. With private-sector employment data coming earlier in the week, the numbers will help the Federal Reserve gauge the labor market’s health. Strong hiring and persistent inflation could complicate the Fed’s decision on whether to continue cutting interest rates at its next meeting. Regarding the Fed, Wednesday’s release of the FOMC’s December meeting minutes should offer insight into policymakers’ internal debates, particularly as a dissenting vote emerged in the last rate cut decision.

Beyond jobs and interest rates, the week will also feature updates on consumer credit, trade deficits, and purchasing manager indexes (PMI) for the services sector. These metrics help paint a picture of economic momentum—or lack thereof—as the country enters the new year. Meanwhile, arriving Friday, consumer sentiment data will offer a glimpse into how Americans feel about their financial futures, a key indicator for spending patterns and economic growth.

In the corporate world, tech giant Nvidia (NVDA) takes center stage at the CES electronics show in Las Vegas. CEO Jensen Huang’s keynote on Monday is expected to highlight the company’s advancements in artificial intelligence (AI) hardware, particularly its Blackwell GPUs. Nvidia has been on a tear, with its stock skyrocketing 170% in 2024 following a massive AI boom. Investors will listen closely for any hints on demand growth, particularly in AI-driven robotics and data centers.

Meanwhile, Delta Air Lines (DAL) and Walgreens Boots Alliance (WBA) are the major companies reporting earnings this week. Delta, rebounding from an IT meltdown that cost the airline $500 million, is banking on strong demand from premium travelers in 2025. On the other hand, Walgreens faces an uncertain future amid reports of a potential sale to a private equity firm as it struggles with operational challenges. With corporate earnings season ramping up, investors will be keen to see how companies are adjusting to shifting consumer behaviors, inflationary pressures, and evolving market conditions………. [read more]