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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.

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Market Talk

The S&P 500 broke above the 5,000 level for the first time as the strong start to 2024 continues.

👉 EARNINGS EDGE: It was another huge week for earnings that kept us busy here at the Investor’s Edge. Disney was the big winner of the week, rising nearly 12% after the company reported earnings that…upgrade to VIP to read the full Earnings Edge.

5 Stories Moving the Market

These are some of the biggest stories from the past week that had an influence on market action.

Powell insists the Fed will move carefully on rate cuts, with probably fewer than the market expects

Federal Reserve Chair Jerome Powell, in a recent "60 Minutes" interview, assured a cautious approach to interest rate cuts in the coming year, emphasizing a slower pace than market expectations.

Powell expressed confidence in the strong economy, highlighting moderated inflation and a robust job market, and acknowledged the absence of the anticipated negative impacts from previous rate hikes. Powell also pledged not to be influenced by the presidential election. 

Powell did state that, despite the robust economy, the Fed wants more evidence of sustainable inflation reaching 2% before considering interest rate cuts. He indicated that the FOMC is unlikely to make the first move in March, contrary to market anticipation.

December inflation data gets revised lower

Revised government data indicates that U.S. monthly consumer prices in December rose less than initially reported. The Consumer Price Index (CPI) for goods and services increased by 0.2%, down from the initially reported 0.3%, according to the Labor Department’s Bureau of Labor Statistics.

Excluding food and energy, the core CPI remained at 0.3% for the month, consistent with the original report. The Federal Reserve tends to focus on core measures for a more accurate assessment of long-term inflation trends.

Additionally, November's data was revised upward to show a 0.2% increase, as opposed to the previously estimated 0.1%.

Despite these adjustments, traders largely anticipate the Fed to maintain its benchmark overnight borrowing rate in March and then implement a rate cut in May, followed by four additional quarter percentage point reductions by year-end, according to CME Group projections.

ESPN, Fox and Warner Bros. Discovery to launch joint sports streaming platform this year

Walt Disney's ESPN, Fox, and Warner Bros. Discovery are set to launch a collaborative sports streaming service in the fall, providing consumers with a new option for accessing live sports content.

The joint platform, which does not have a name or a confirmed price yet, will be owned by a newly formed company with its own leadership team. Disney, Fox, and Warner Bros. Discovery will each hold a one-third stake in the venture.

Users will have the option to subscribe directly through a new app or can bundle the product with Disney+, Hulu, and Max streaming platforms. The offering will be a streamlined package of linear networks, specifically designed for sports enthusiasts, featuring all sports-related broadcast and cable networks owned by the three companies, along with ESPN+.

While the pricing is yet to be determined, industry insiders suggest a potential starting point of $45 to $50 per month, with lower introductory pricing to attract early subscribers. Even with promotional rates, the service is expected to cost more than $30 per month.

Yellen sees more commercial real estate stress and losses ahead

U.S. Treasury Secretary Janet Yellen stated that she anticipates additional stress and financial losses in the banking sector due to weakness in the commercial real estate market.

However, she assured a Senate Banking Committee that these challenges are not expected to pose a systemic risk to the overall banking system. Yellen mentioned that bank regulators are actively collaborating with banks to address risks arising from higher post-pandemic vacancy rates in office buildings and increased interest rates for refinancing loans, particularly in larger cities.

While acknowledging falling valuations and the likelihood of stress and losses, Yellen expressed confidence that the exposure of the largest banks is relatively low. She noted the potential for smaller banks to be affected by these developments but emphasized that they are working to manage the situation.

Yellen did not directly address the recent stock-market sell-off experienced by New York Community Bancorp, which reported a surprise fourth-quarter loss due to larger provisions for potential commercial real estate loan defaults. The bank's stock fell an additional 22% this week after a 42% decline in the previous week.

Google rebrands Bard AI to Gemini and launches a new app and subscription

Google has announced a significant rebrand of its artificial intelligence chatbot and assistant, Bard, now renamed Gemini. This rebranding aligns with the suite of AI models that power the chatbot.

Alongside the name change, Google introduced new ways for users to access Gemini, including a dedicated Android app for Android users and integration within the Google app on iOS for iPhone users.

The move emphasizes Google's commitment to investing in AI assistants or agents, covering a range of tools from chatbots to coding assistants and other productivity tools.

Additionally, Google unveiled a new AI subscription option, offering access to Gemini Ultra 1.0, the company's most powerful AI model, priced at $19.99 per month through Google One, its paid storage offering. Existing Google One subscribers will have this cost included in their existing storage plans, with a two-month free trial also available.

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Premium Posts of the Week

We continue to push out more and more content every week to give investors that edge. Here are the posts premium subscribers received this week.

Edge Report

Mondays are for the investors. Every Monday morning we share exactly what we’re watching in the week ahead, how we’re positioning, and even get a sneak peek into our systems and models. This week we offered our view on upcoming earnings and shared an options strategy for a potential pullback in Amazon. See the full report here:

Top Stocks to Watch - February

This week we introduced a new article for premium subscribers where we share our top stocks that we are watching in the month ahead. This week, we performed a full analysis of 10 stocks and shared our price targets.

We decided to unlock one stock’s analysis so everyone can see the value premium members get. Get your sneak peek here:

Earnings Recap

Every week during earnings season we share a recap of the quarterly reports from stocks that we cover. You can see this week’s earnings recaps here:

The Week Ahead

Earnings reports and inflation data will shape the week ahead.

Earnings Reports

The biggest reports of the earnings season may be behind us, but there are still a few big names left to report. Coca-Cola, Cisco, John Deere, Waste Management, Shopify, AirBnB and Coinbase are just a few big names reporting next week. We will be covering all of these companies and then some.

Economic Reports

Next week is all about inflation data. Both the CPI and PPI reports will be released and we will see if inflationary prices continued to ease in January.

We can also expect retail sales, housing market and consumer sentiment data.

There will also be several speeches from Fed members, and you can bet investors will be listening very closely for clues on interest rate policy going forward.

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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.