We say hello to February. In Friday’s session, the stocks turned over after President Donald Trump said tariffs on imports from China, Mexico, and Canada would begin Saturday. And, come Saturday, they went into effect, adding another thing for Wall Street to worry about after the final week of January was so jampacked with news that it seemed to go on forever. The DeepSeek-driven tech rout last Monday split the market in a rotation that saw the Nasdaq plummet and the Dow Jones Industrial Average finish modestly higher. .IXIC .DJI,.SPX mountain 2024-12-31 Performance since Dec. 31. 2024 The tug-of-war raged all week over whether the Chinese startup’s efficient, lower-cost artificial intelligence model would reduce the need for as many of Nvidia ‘s hard-to-get and expensive AI chips, which are the best in show. Throw in the Federal Reserve on Wednesday deciding to hold interest rates steady after three cuts last year, and the Nasdaq and Dow remained in their respective corners — dropping 1.6% and gaining nearly 0.3% for the week. The S & P 500 lost 1% last week. While the market was overbought for most of the week, according to the S & P 500 Short Range Oscillator , Friday’s selling broke the streak. Our bias in overbought markets is to trim stock exposure. We did that last week and communicated it in three trade alerts . For the entire month of January, stocks finished higher, with the Dow, S & P 500, and Nasdaq up 4.7%, 2.7%, and 1.6%, respectively, for the month. NVDA mountain 2025-01-24 Performance since Jan. 24 Nvidia was the stock story of the week. It was crushed Monday in the DeepSeek rout. It made some half-hearted attempts at bouncing but was one of our biggest losers of the week, down nearly 16%. On Thursday, Jim Cramer told Club members he would have trimmed Nvidia if not restricted. He said he still believes in Nvidia long-term but wondered whether the portfolio needed to lower its exposure a little bit since the jury is still out on the impact of DeepSeek. Providing some solace, Meta Platforms and Microsoft , alongside their earnings last week , indicated that their spending on capital expenditures won’t change. Both CEOs also spoke favorably about how DeepSeek might help wider adoption of AI. The next test is what Alphabet and Amazon have to say about their capex plans when those two Club names report earnings in the coming week. The future of AI data center play Eaton may also depend on where all the tech giants land on AI spending, but alongside its earnings report Friday , its CEO was adamant it’s not seeing any customers change their plans. Data center-related sales jumped 45% in the quarter. The stock was decimated Monday. We bought some shares early Tuesday around $303 each before the stock went on a four-session bounce to $327. Eaton stock ended an up-and-down session Friday slightly lower. During Friday’s Morning Meeting, Jim Cramer said Eaton is a “good Trump stock” because the company is engaged in megatrends beyond the data center, too, such as reshoring and infrastructure — all priorities of the new administration. Eaton did lose 11.5% for the week. The choppy market wasn’t all bad for our portfolio. In fact, we had more winners than laggards in the portfolio last week. Solar company Nextracker and Starbucks took the top two spots, gaining 23% and nearly 9%, respectively, for the week as investors gained more confidence in the stocks following their earnings reports last week. Apple occupied the No. 3 spot on our weekly gainers list, jumping nearly 6% for the week, following the company’s better-than-feared earnings and outlook Thursday evening. China was still soft and tariffs won’t help. China is a key part of Apple’s supply chain despite efforts to diversify in recent years. As if all that were not enough to digest, the Fed holding rates steady and saying inflation remains “somewhat elevated” fueled the debate over whether the economy is too strong to consider additional rate cuts anytime soon. The central bank’s favorite inflation gauge — the personal consumption expenditures price index — was up 2.6% headline and 2.8% core in December. While both basically matched expectations, they were higher than the Fed’s stated goal of bringing inflation back down to 2%. Going forward, central bankers have their work cut out for them as Trump pressures them to cut rates while at the same time threatening trade tariffs that many economists believe would be inflationary. Earnings and the economy will remain front and center in the week ahead. Let’s start with looking at what we expect from a busy week of jobs data — of which the Fed and Wall Street will be riveted. Jobs, Jobs, Jobs The parade of numbers measuring the health of the labor market starts Tuesday at 10 a.m. ET with the government’s Job Openings and Labor Turnover Survey , or JOLTS as it’s referred to. Economists estimate that job openings in December ticked down month over month to 8.14 million compared to November’s nearly 8.1 million. On Wednesday, at 8:15 a.m. ET, ADP releases its January reading of hiring trends at U.S. companies. The nation’s private sector is expected to have added 155,000 last month compared to December’s gain of 122,000, which was less than the 146,000 added in November and less than the 136,000 forecast. Investors try to read the tea leaves in the ADP data as an indicator of how the government’s monthly employment turn out. ADP has a spotty track record in this regard — and that showed last month , when December nonfarm payrolls grew by 256,000 — up from 212,000 in November and above the 155,000 forecast. On Friday, at 8:30 a.m. ET, the government releases its January employment report , with economists expecting nonfarm job growth of 155,000 , according to FactSet. Collectively, all these jobs numbers could help determine whether the Fed lives up to its two-rate cut projection for 2025 or not. As of Friday, the market was still leaning toward two cuts this year, according to the CME FedWatch tool, though the probabilities are far from conclusive. Earnings, earnings, earnings GOOGL 1Y mountain Alphabet 1 year Alphabet kicks off the week Tuesday evening, and commentary on the tech giant’s AI spending in light of DeepSeek is much anticipated. It matters not only to the Google parent’s business, but it also impacts other parts of our portfolio — namely, Broadcom , which co-designs Google’s custom AI chips; Nvidia; and Eaton. For context, on last year’s fourth-quarter earnings call, Alphabet did not specify an exact capex guide, saying only that investment is expected to be “notably larger” than 2023. As for the actual results, the performance of the Google Search and YouTube ad businesses will be important, particularly after rival Meta’s strong results. We’re also closely watching the growth rate of Google Cloud, which came in at an impressive 35% in the third quarter, outpacing the expansion seen at Amazon Web Services and Microsof’s Azure in that period. Alphabet enters the quarter as one of Jim’s least favorite members of the so-called Magnificent Seven. As of Friday, the Street is looking for sales of $96.56 billion and earnings of $2.13 per share, according to LSEG. DIS 1Y mountain Disney 1 year On the other hand, our attitude toward Disney heading into its Wednesday morning release is more positive. It earned that with its excellent fiscal fourth-quarter results and upbeat guidance in mid-November that sent the stock up 6%. Since then, shares have added another 4%. Streaming profitability will be a key metric in the upcoming release, as it was in November. We’ll also be listening for updated color on Disney’s performance and projections for its movie slate, which has emerged to be a bright spot for the company; Disney had three 2024 releases top the coveted $1 billion box office benchmark, with “Moana 2” the most recent to do so. Popular movies have a multiplier effect on the rest of Disney’s businesses. While executives already warned investors that hurricanes in Florida would impact Disney World results in the quarter, we’re also on guard for similar signals about the Los Angeles wildfires hurting Disneyland’s performance in the current quarter. Analysts expect Disney to report sales of $24.62 billion and earnings of $1.45 per share, as of Friday, according to LSEG. SWK 1Y mountain Stanley Black & Decker 1 year Stanley Black & Decker also is scheduled to report before the bell Wednesday, and we’re under no illusions that this will be a stellar report because bond yields — and the correlated mortgage rates — trended higher during the October-to-December period. That really threw a wrench into the idea that the Fed’s rate cuts would spur housing market activity, benefiting Stanley Black & Decker’s business in response. The toolmaker’s outlook for 2025 will probably be disappointing, too. The stock has gotten off to a solid start this year, but we recently took advantage of that to trim our position , in accordance with our sell-into-strength 3 rating on the stock. On the call, we expect margins and profitability to be a focus of analysts’ questions, and any updates management can provide on its tariff mitigation strategy and the potential for end market demand to improve would be welcome. As of Friday, the Street is looking for sales of $3.58 billion and earnings of $1.27 per share, according to LSEG. HON 1Y mountain Honeywell 1 year Thursday morning is a busy one, with four Club names reporting. Honeywell is among them, and the industrial conglomerate is widely expected to announce it is splitting up into two publicly traded companies under pressure from activist Elliott Management. One company would be focused on automation, while the other would consist of its crown jewel aerospace and defense businesses. The expected timeline and specific details on the structure of the separation will be important. While Jim has long called for this kind of move, the performance of the company continues to leave much to be desired. It’s been quite some time since Honeywell’s quarterly earnings and sales guidance have both beaten expectations. We’re also still looking for its short-cycle businesses to see a material rebound. In October, Honeywell said all four of its operating segments — aerospace technologies, industrial automation, building automation, and energy and sustainability solutions — should see organic growth this year, so hope to hear a reiteration of that projection. Same goes for expectations of companywide segment margin to expand in 2025. As of Friday, Honeywell is expected to report fourth-quarter earnings per share of $2.32 on revenues of $9.83 billion, according to LSEG. LLY 1Y mountain Eli Lilly 1 year Eli Lilly gave investors a preview of its disappointing fourth-quarter results in mid-January during the JPMorgan Healthcare Conference, so we already have a general idea of how its all-important GLP-1 drugs — Zepbound for obesity and Mounjaro for type-2 diabetes — did in the quarter, with roughly $1.9 billion and $3.5 billion of revenues, respectively. On the call, we’re hopeful that executives shed more light on the GLP-1 drug channel inventory dynamic that’s hurt them two quarters in a row. We also already know Eli Lilly is projecting companywide sales between $58 billion and $61 billion in 2025. Fortunately, recent prescription trends for Zepbound and Mounjaro have been trending higher, which should help the market get more comfortable with Lilly’s ability to meet its guidance. We’ll be listening for any updates on manufacturing expansion, expected trial results for its oral GLP-1 orforglipron and competitive dynamics. As of Friday, the Street is looking for sales of $13.71 billion and earnings of $4.92 per share, according to LSEG. LIN 1Y mountain Linde 1 year Linde, also due out Thursday morning, is more of a macro read on the global industrial economy. In what remains a subdued environment for volume growth, we’re looking to see the industrial gas giant maintain its consistent double-digit percentage earnings growth through pricing and cost efficiencies. In the most recent, Linde’s project backlog grew to a record $10 billion, so we’ll see where it stands this time around. As of Friday, Linde is expected to earn $3.93 a share on revenues of $8.4 billion, LSEG data shows. BMY 1Y mountain Bristol-Myers Squibb 1 year Bristol-Myers Squibb is all about Cobenfy, and the color that management can share on the launch of the schizophrenia drug following U.S. regulatory approval in late September. Commentary on insurance access, in particular, will be key. More generally, the performance of its “growth portfolio” — which also includes products such as anemia treatment Reblozyl, lymphoma drug Breyanzi and Camzyos for heart condition — will be notable given the company’s looming patent cliffs for blood thinner Eliquis and cancer therapy Opdivo. As of Friday, analysts expect Bristol-Myers to report sales of $11.55 billion and earnings of $1.45 per share, according to LSEG. AMZN 1Y mountain Amazon 1 year Amazon closes out the busy week on Thursday evening, and we’ll be getting the results from its pivotal holiday quarter. The company’s retail margins will be a crucial metric, given expanding profitability has been a big focus in recent quarters. Amazon CEO Andy Jassy has talked about a few ongoing initiatives to lower the cost to deliver packages, including more same-day delivery facilities and robotics investments, so we’ll listen for any progress reports there. Amazon Web Services’ growth rate will be a key watch item, just like with Google Cloud, because it helps show whether its hefty AI investments are paying off. In the third quarter, AWS grew revenue 19.1% on an annual basis and operating income jumped 50%. At the time, executives also said they expected capex in 2025 will exceed the projected $75 billion for 2024. Updated commentary on capex following DeepSeek’s emergence also is key for both Amazon and our other AI stocks. As of Friday, Amazon is expected to report fourth-quarter sales of $187.32 billion and earnings of $1.49 per share, LSEG data shows. Week ahead Monday, Feb. 3 Before the open: Tyson Foods (TSN), Alliance Resource Partners (ARLP), IDEXX Labs (IDXX), Twist Biosciences (TWST) After the close: Palantir Technologies Inc. (PLTR), Kyndryl Holdings, Inc. (KD), RBB Bancorp (RBB), Clorox Co. (CLX), Physicians Realty Trust (DOC), BellRing Brands, Inc. (BRBR), NXP Semiconductors N.V. (NXPI) Tuesday, Feb. 4 JOLTS report at 10 a.m. ET Before the open: PayPal (PYPL), Spotify Technology S.A. (SPOT), Pfizer, Inc. (PFE), Regeneron Pharmaceuticals Inc. (REGN), PepsiCo, Inc. (PEP), Merck & Co., Inc. (MRK), Enterprise Products Partners L.P. (EPD), Ferrari N.V. (RACE), Estée Lauder Companies, Inc. (EL), Archer-Daniels-Midland Co. (ADM), Apollo Global Management, LLC (APO), Marathon Petroleum Corp. (MPC), Ball Corporation (BALL), Cummins, Inc. (CMI), Willis Towers Watson (WTW), Centene Corporation (CNC), KKR & Co. L.P. (KKR) After the close: Alphabet (GOOGL) , Advanced Micro Devices, Inc. (AMD), Snap Inc. (SNAP), Chipotle Mexican Grill Inc (CMG), Enphase Energy Inc (ENPH), Amgen, Inc. (AMGN), Electronic Arts Inc (EA), Juniper Networks, Inc. (JNPR), Prudential Financial, Inc. (PRU), Mondelez International Inc. (MDLZ), Match Group, Inc. (MTCH), Allegiant Travel Company (ALGT), Mattel, Inc. (MAT), Simon Property Group, Inc. (SPG) Wednesday, Feb. 5 ADP private payrolls report at 8:15 a.m. ET Before the open: Walt Disney Co (DIS), Stanley Black & Decker (SWK), Uber Technologies (UBER), Novo Nordisk (NVO), Boston Scientific Corporation (BSX), Toyota Motor Corp. (TM), Aurora Cannabis Inc (ACB), Old Dominion Freight Line (ODFL), Johnson Controls (JCI), GlaxoSmithKline plc (GSK), RXO (RXO), T. Rowe Price Group (TROW) After the close: Ford Motor Company (F), Arm Holdings (ARM), Qualcomm (QCOM), Symbotic Inc. (SYM), Viking Therapeutics (VKTX), O’Reilly Automotive (ORLY), Align Technology, Inc. (ALGN), DHT Holdings, Inc. (DHT), AFLAC (AFL), Allstate Corp. (ALL), Corteva, Inc. (CTVA), McKesson (MCK), Metlife (MET) Thursday, Feb. 6 Before the open: Bristol Myers Squibb (BMY), Eli Lilly & Co. (LLY), Honeywell International, Inc. (HON), Linde (LIN), Roblox Corporation (RBLX), ConocoPhillips (COP), Peloton Interactive (PTON), Hershey Company (HSY), Yum! Brands, Inc. (YUM), Blue Owl Capital (OWL), Tapestry, Inc. (TPR), Philip Morris International (PM), Under Armour (UAA), Arcelor Mittal (MT), Air Products & Chemicals (APD), Yum China Holdings, Inc. (YUMC), Becton, Dickinson & Co. (BDX), AstraZeneca PLC (AZN), Ralph Lauren Corporation (RL), IntercontinentalExchange Inc. (ICE), Warner Music Group Corp (WMG), Valvoline (VVV), XPO Logistics, Inc. (XPO) After the close: Amazon (AMZN), Cloudflare (NET), Affirm Holdings (AFRM), e.l.f. Beauty, Inc. (ELF), Fortinet (FTNT), Microchip Technology (MCHP), Pinterest (PINS), Victory Capital Holdings (VCTR), Monolithic Power Systems (MPWR), Skechers U.S.A. Inc. (SKX), Take-Two Interactive Software (TTWO) Friday, Feb. 7 Nonfarm payroll report at 8:30 a.m. ET Open: Canopy Growth Corporation (CGC), Flowers Foods Inc. (FLO), Plains All American Pipeline (PAA), Avantor (AVTR), Newell Brands Inc. (NWL) (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. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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Pedestrians walk in front of the New York Stock Exchange, decorated with a giant U.S. flag, in New York City, Nov. 6, 2024.
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We say hello to February.
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