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Mid-Week Wrap-Up - January 15th, 2025

Mid-Week Wrap-Up - January 15th, 2025

Markets surge as inflation reports not as bad as expected

CMG Venture & Mark Roussin
January 15, 2025

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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 21,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The major indexes all higher to start the week following better than expected inflation reports and strong bank earnings.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

US consumer prices post largest gain in nine months; underlying inflation slowing

Consumer prices rose 0.4% in December, bringing the annual inflation rate to 2.9%, aligning with expectations. Core inflation, excluding food and energy, rose 0.2% monthly and 3.2% annually, slightly better than forecasts of 3.3%.

Key drivers included a 2.6% increase in energy prices (4.4% gasoline surge, accounting for 40% of the CPI gain) and a 0.3% rise in food prices. For 2024, food prices rose 2.5%, while energy prices declined 0.5%.

Shelter costs increased 0.3% monthly and 4.6% annually, the slowest annual rise since January 2022. Service prices excluding rents climbed 4% annually, the smallest gain since February 2024.

Separately, the Producer Price Index (PPI) rose 0.2% in December, down from November's 0.4% and below the 0.4% forecast. Core PPI, excluding food and energy, was flat monthly, while the broad PPI rose 3.3% annually in 2024, a significant increase from 1.1% in 2023.

👉 EDGE ALERT: Despite inflation data coming in line with expectations, both the CPI and PPI numbers showed…upgrade to Edge+ to read the full Edge Alert.

SEC sues Elon Musk, alleging failure to properly disclose Twitter ownership

The SEC has filed a lawsuit against Elon Musk, accusing him of securities fraud for failing to disclose his stake in Twitter (now X) in 2022, which allegedly allowed him to buy shares at "artificially low prices."

Musk built a position exceeding 5% in the company but delayed reporting his holdings by more than 10 days, violating disclosure rules. The SEC claims this delay enabled Musk to underpay by at least $150 million for shares, as public knowledge of his interest could have driven up the stock price.

The lawsuit follows an SEC investigation into whether Musk or his associates committed securities fraud related to the disclosures.

Musk has denied wrongdoing, claiming the SEC pressured him to settle, including a fine, within 48 hours under threat of multiple charges.

📚 EDGE-UCATION: What is the SEC?

The SEC stands for the Securities and Exchange Commission. It is a U.S. federal government agency responsible for regulating and overseeing the securities markets, which include stocks, bonds, and other investment instruments, to ensure fairness, transparency, and investor protection.

Key Responsibilities of the SEC:

Enforcing Securities Laws: The SEC ensures compliance with securities laws like the Securities Act of 1933 and the Securities Exchange Act of 1934, which govern how securities are offered and traded.
Protecting Investors: It works to prevent fraud, manipulation, and unfair practices in the securities markets, ensuring that investors receive accurate and timely information to make informed decisions.
Regulating Markets: The SEC oversees major players in the securities industry, including stock exchanges, brokerage firms, investment advisors, and mutual funds.
Facilitating Capital Formation: By promoting efficient markets, the SEC helps businesses raise capital while maintaining investor confidence.
Disclosure Requirements: Companies publicly traded on U.S. stock exchanges must regularly disclose financial and other significant information, ensuring transparency for investors.

The SEC plays a critical role in maintaining trust in the financial markets and is headquartered in Washington, D.C.

Bank earnings: JPMorgan Chase, Wells Fargo, and more report results

JPMorgan, Wells Fargo, Citigroup, and BlackRock kicked off bank earnings this morning and the results were very strong across the board. Here’s how the banks performed:

JPMorgan shares rose after reporting record profit of nearly $60 billion in 2024. Here are the key numbers from the report:

Earnings per share: $4.81 vs. $4.09 expected
Revenue: $42.77 billion vs. $41.90 billion expected

Goldman Sachs shares rise on earnings beat and strong trading results. Here are the key numbers from the report:

Earnings per share: $11.95 vs. $8.21 expected
Revenue: $13.87 billion vs. $12.36 billion expected

Citigroup shares jump on earnings beat, $20 billion stock buyback plan. Here are the key numbers from the report:

Earnings per share: $1.34 vs. $1.22 expected
Revenue: $17.44 billion vs. $19.51 billion expected

Wells Fargo shares surged following reporting fourth quarter profit that topped estimates. Here are the key numbers from the report:

Earnings per share: $1.43 vs. $1.35 expected
Revenue: $20.38 billion vs. $20.58 billion expected

BlackRock shares increased after beating expectations and reporting record assets under management. Here are the key numbers from the report:

Earnings per share: $11.93 vs. $11.27 expected
Revenue: $5.68 billion vs. $5.57 billion expected

*Note - our full breakdown of the reports from JPMorgan, Goldman Sachs and BlackRock will be sent out in Friday’s Earnings Recap.

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

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The Second Half

Earnings season carries on as several major names are scheduled to report, while key retail sales data will also have an affect on trading.

Earnings Reports

We will be watching earnings reports from Taiwan Semi, UnitedHealth, Bank of America and Morgan Stanley on Thursday.

Here is the calendar of earnings releases scheduled for the rest of the week:

Source: Earnings Whisper

Economic Reports

With the inflation reports in the rear-view, attention now turns to the retail sales data tomorrow. We also get initial jobless claims and several housing reports to end the week.

Here is the full calendar of events scheduled for the remainder of the week:

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.

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