The first trading week of President Donald Trump’s second term was positive for all three major averages, as investors cheered the incoming administration’s pro-business policies and corporate earnings largely came in stronger than expected. The S & P 500 and Nasdaq each rose about 1.7%, while the Dow climbed 2.2%. The S & P 500 also notched a new all-time closing high on Thursday. Most encouraging for the bulls isn’t that the market notched two consecutive weeks in the green and is up on the year, but rather how it got here — with broad-based stock gains. For the week, nine of the 11 S & P 500 sectors closed higher, and with the exception of energy, all sectors are now higher on the year. While the lagging energy hurts investors in that sector, we must remember that lower energy prices are good for the rest of the market. Energy is a major determining factor of inflation, a key input cost for pretty much all companies, and an unavoidable cost for the majority of consumers. That means the lower the energy prices, the less pressure on corporate profit margins and the more discretionary dollars for consumers to spend on other goods. Within the portfolio, Abbott Labs was the only company to report fourth-quarter earnings, and while the results weren’t clean, there was enough strength under the hood to make us optimistic about the year ahead. It was also enough, against weak expectations, to drive shares up 10.2%, making it the top performer in the portfolio for the week. The other two top performers: Eli Lilly , which is looking to mount a comeback after analysts at Wolfe Research reported strong week-over-week prescription growth for obesity and weight loss drugs Mounjaro and Zepbound; and Eaton , which should benefit from President Trump’s clear focus on leading the world in AI, which the industrial stock supports through its power and energy products. This week, Trump announced Stargate, a $500 billion dollar joint venture between OpenAI, Oracle and SoftBank to build the infrastructure needed to expand AI Apple was the worst performer, as investors fear the company’s upcoming quarter and guidance will disappoint. That was followed by Coterra Energy , which fell on worries about increased oil production (which would lower prices, and profits), and Constellation Brands , which could see its beer produced in Mexico hit with a 25% tariff imposed by Trump as soon as Feb. 1. Next week earnings season ramps up with eight Club names reporting. Here’s what we’re watching for with each name: Starbucks: The quarter will probably be ugly as the coffee chain is still in the beginning stages of CEO Brian Niccol’s turnaround plan. But what the market will focus on is signs of improvement in the U.S. and any updates on Niccol’s broader strategy. As of Friday, according to LSEG, the Street is looking for Starbucks sales of $9.3 billion and earnings of 67 cents per share. Nextracker: Can this maker of solar trackers and software build off last quarter’s strong results, including its growing backlog? What happens to the utility scale solar market under the Trump administration? The Street is looking for Nextracker sales of $650.4 million and earnings of 59 cents per share. Danaher: The life-sciences company announced its fourth-quarter results early last week at the JPMorgan Healthcare Conference, so Danaher management’s guidance for 2025 and any bioprocessing commentary are the new items to focus on. Meta Platforms: On Friday, CEO Mark Zuckerberg announced the social media giant’s capital expenditure forecast for 2025. At $60 billion to $65 billion, spend is well above the expected $51 billion. The announcement helps set expectations for next week’s earnings release and will allow investors to instead focus on the benefits of the investment, rather than upfront cost. After initially selling off, Meta shares roared back, likely acknowledging Zuckerberg’s proclamation that “this will be a defining year for AI.” As we’ve heard in the past, many tech CEOs believe that underinvesting in AI is a far greater risk than overinvesting. That doesn’t mean that investors can overlook all spending. Meta has so far gotten a bit of a pass, perhaps because it is already seeing enhanced engagement advertiser ROI and has a leading model in the market in Llama 3, with Llama 4 expected soon. The Street is looking for sales of $46.99 billion and earnings of $6.77 per share. Microsoft: Growth rates at web unit Azure will remain front and center and we’re interested to hear any additional commentary management can provide as to how the company sees AI adoption playing out and how it stands to benefit from the Stargate investment. The Street is looking for Microsoft sales of $68.8 billion and earnings of $3.12 per share. Dover: We’re looking for continued momentum in its key growth platforms like thermal connectors and clean energy components and abating headwinds in areas like beverage cans, heat exchanges, and polymer processing. The company is a serial deal maker so we’ll look for an M & A update. As of Friday, according to LSEG, the Street is looking for Dover sales of $1.95 billion and earnings of $2.08 per share. Apple: We’re not expecting a great quarter. The good news is, Wall Street has been lowering numbers for weeks. That means Apple has a low bar to overcome. Guidance will likely determine the price action of Apple stock, along with any commentary on potential tariffs on Chinese goods. The Street is looking for sales of $124.2 billion and earnings of $2.35 per share. Eaton: In addition to the reported results, commentary on end market demand is key, especially as it relates to the data center. What impact will more AI infrastructure investments announced under the Trump administration have on Eaton ? As of Friday, according to LSEG, the Street is looking for sales of $6.34 billion and earnings of $2.81 per share. On the economic front, on Friday we get the release of the December personal income and spending report, which includes the core PCE price index, the Fed’s preferred measure of inflation. We saw just how powerful a good — meaning slightly lower than expected — reading can be for the market a week ago when we got a soft update on consumer prices. Anything a bit lower than the 2.8% economists are forecasting should be welcome by the bulls. Federal Reserve Chair Jerome Powell speaks on Wednesday following the conclusion of the FOMC’s two-day policy meeting. Economists expect the committee will keep rates unchanged. Other notable reports include the first read on fourth-quarter GDP on Thursday, and updates on the state of the housing market with December new home sales out Monday and December pending home sales out Thursday. Week ahead Monday, Jan. 27 10 a.m. EST: New Home Sales Before the bell: SoFi (SOFI), AT & T (T) After the bell: Nucor (NUE), WR Berkley (WRB), Brown & Brown (BRO), Sanmina (SANM), Crane (CR) Tuesday, Jan. 28 Before the bell: Boeing (BA), General Motors (GM), Lockheed Martin (LMT), Royal Caribbean Cruises (RCL), RTX Corporation (RTX), Synchrony (SYF), Kimberly-Clark (KMB), SYSCO (SYY), Invesco (IVZ), JetBlue (JBLU), Polaris (PII), Adient (ADNT), PACCAR (PCAR), Xerox (XRX) After the bell: Starbucks (SBUX), Nextracker (NXT), Stryker (SYK), Chubb (CB), Logitech (LOGI), SAP (SAP), Packaging Corporation of America (PKG) Wednesday, Jan. 29 2 p.m. EST: FOMC Meeting Before the bell: Danaher (DHR), ASML (ASML), T-Mobile (TMUS), ADP (ADP), General Dynamics (GD), MSCI (MSCI), Nasdaq (NDAQ), Flex (FLEX), Group 1 Automotive (GPI), Hess (HES), Norfolk Southern (NSC), Otis (OTIS) After the bell: Meta Platforms (META), Microsoft (MSFT), Tesla (TSLA), International Business Machines (IBM), High Tide (HITI), Lam Research (LRCX), ServiceNow (NOW), Celestica (CLS), Wolfspeed (WOLF), Century Communities (CCS), Western Digital (WDC), Whirlpool (WHR), Canadian Pacific Kansas City (CP), Levi Strauss & Co. (LEVI), Las Vegas Sands (LVS), WM (WM), Landstar System (LSTR), Axis Capital Holdings (AXS), Meritage Homes (MTH) Thursday, Jan 30. 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. EST: Gross Domestic Price Index 10 a.m. EST: Pending Home Sales Before the bell: Dover (DOV), United Parcel Service (UPS), Mastercard (MA), Dow Chemical (DOW), Blackstone (BX), Southwest Airlines (LUV), Nokia (NOK), Allegro MicroSystems (ALGM), Comcast (CMCSA), Caterpillar (CAT), SiriusXM Holdings (SIRI), STMicroelectronics (STM), Thermo Fisher Scientific (TMO), CIGNA (CI), International Paper (IP), Mobileye Global (MBLY), Dynatrace (DT), 1-800-Flowers.com (FLWS), Altria Group (MO), Northrop Grumman (NOC), Sherwin-Williams (SHW), Valero Energy (VLO), Brookfield Infrastructure Partners (BIP), Cardinal Health (CAH), Check Point Software Technologies (CHKP), Lazard (LAZ), L3Harris (LHX), ManpowerGroup (MAN), PulteGroup (PHM), Sanofi (SNY), Tractor Supply Company (TSCO) After the bell: Apple (AAPL), Intel (INTC), Visa (V), KLA Corporation (KLAC), Canadian National Railway (CNI), Baker Hughes (BKR), Atlassian Corporation (TEAM), Arthur J. Gallagher & Co. (AJG), Deckers Brands (DECK), United States Steel (X), AppFolio (APPF), First Business Financial Services (FBIZ), Federated Hermes (FHI), FinWise Bancorp (FINW), Hartford Financial Services Group (HIG), Olin Corporation (OLN), Orchid Island Capital (ORC), SkyWest (SKYW), Weyerhaeuser (WY) Friday, Jan. 31 8:30 a.m. EST: Personal Spending & Income Before the bell: Eaton (ETN), Exxon Mobil (XOM), AbbVie (ABBV), Chevron Corporation (CVX), Colgate-Palmolive (CL), Autoliv (ALV), Booz Allen Hamilton Holding (BAH), Brookfield Renewable Partners (BEP), Charter Communications (CHTR), LyondellBasell Industries (LYB), Phillips 66 (PSX), Franklin Resources (BEN), W.W. Grainger, Inc. (GWW), Novartis International AG (NVS), AON Plc (AON) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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Apple CEO Tim Cook (C) poses for selfies with customers during Apple’s iPhone 16 launch in New York on September 20, 2024.
Timothy A. Clary | AFP | Getty Images
The first trading week of President Donald Trump’s second term was positive for all three major averages, as investors cheered the incoming administration’s pro-business policies and corporate earnings largely came in stronger than expected.