The new year 2025 has ushered significant anticipation among investors, with the stock market and federal agencies preparing for key announcements and economic indicators. Following the holiday season, investors enter the first full week of January with cautious optimism about financial stability and growth.
Leading up to the first week of trading, U.S. stocks have faced some instability. Over the last five trading sessions, the S&P 500 has dipped more than 1.5%, the Nasdaq Composite fell nearly 2%, and the Dow Jones Industrial Average is down roughly 1.5%. Observers are now turning their eyes toward upcoming labor market data, as Friday’s December jobs report from the Bureau of Labor Statistics is positioned as the week’s most significant release.
The U.S. labor market has shown signs of cooling through 2024, yet the Federal Reserve expressed confidence about its overall stability. Fed Chair Jerome Powell, during his final press conference of the year, highlighted the market’s gradual adjustments. "The labor market is on solid footing, but employment growth slowed and overall labor market conditions cooled throughout 2024," noted Morgan Stanley U.S. economist Sam Coffin.
Economists are predicting the December jobs report will exhibit job growth of around 153,000—down from 227,000 positions added previously—and maintain the unemployment rate at approximately 4.2%. The upcoming report will provide pivotal insight as the Federal Reserve approaches its meeting scheduled for January 30-31, with markets currently pricing only an 11% chance of rate cuts.
This week also highlights significant events for the tech sector, particularly during the Consumer Electronics Show (CES) taking place starting Monday. Nvidia’s CEO Jensen Huang is set to deliver the keynote, presenting insights on their advancements and expectations around their new Blackwell chip. Despite Nvidia’s stock declining slightly since its previous earnings report, shares skyrocketed nearly 150% throughout 2024. Analysts expect Huang to address the growing demand for new technologies.
Alongside tech developments, major corporate earnings reports are scheduled. Delta Air Lines, Walgreens, and multiple financial institutions will release their quarterly performances this week. Delta, after facing scrutiny for operational disruptions leading to significant losses, is anticipated to share its outlook for the new year amid expectations of increased travel.
The earning reports will commence with Walgreens releasing its results on Thursday, and HSBC also slated to report. The potential sale of Walgreens to private equity firms has circulated alongside challenges it faces within the industry.
On Tuesday, the U.S. trade deficit report is expected to give insights on the country’s balance, providing important data for assessing the overall economic health. Insights on job openings and private-sector employment will also inform market strategies during this period.
Investors will be closely monitoring preliminary reports, such as the consumer sentiment survey due on Friday. Previews indicate it may offer insights on consumer confidence entering the new year, particularly important as economic conditions fluctuate.
Henry Meyer, chief economist at BofA, emphasized the importance of observing these milestones: "The job reports and consumer sentiments are key indicators for assessing market health and providing directions for financial strategies, especially with changing political agendas under President Trump’s administration."
Trump’s anticipated return as the 47th President of the United States has generated speculation on future fiscal policies, potentially impacting both stock and cryptocurrency markets. Having taken office during such uncertain economic times adds intrigue to the anticipated political climate and its ripple effects on market movements.
Adding to the week’s activities are various Federal Reserve speaker events scheduled to offer perspectives on current monetary policies and interest rates adjustments. Fed governors have been vocal about their outlook on the economy, often emphasizing the need for collected responses based on the data provided during this busy week.
This week’s financial calendar is filled with notable dates, including the initial jobless claims report released earlier than usual on Wednesday to accommodate the national day of mourning for the former President Jimmy Carter, who passed away on December 29, 2024. Stock exchanges will be closed on January 9, reflecting on Carter's legacy with adjusted trading hours across the board.
Looking forward, this week serves as more than just statistical releases; it’s pivotal for gauging both market reactions and strategic firm directives. The combination of the jobs report, tech conference, and significant corporate earnings releases sets the stage for the financial narrative of early 2025, one showcasing cautious optimism blended with the inherent unpredictability of economic indicators.
With so much on the line, investors will navigate these currents aiming to make informed decisions. Monday’s CES event and subsequent data releases could decisively influence market direction as the year commences.