Historical Parallels to 2024 and Technical Takes on Last Week’s Rally

LPL Research provides insights on last week’s market rally, identifies historical stock market parallels to 2024, and previews Q4 earnings season.

Last Edited by: LPL Research

Last Updated: January 21, 2025

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Jeffrey Buchbinder (00:00):

Hello everyone and welcome to LPL Market Signals. Jeff Buchbinder here, your regular host with my friend and colleague Adam Turnquist on a chilly Tuesday morning here. Hopefully everybody had a nice weekend. Adam, I'm surprised you're not more bundled up over there.

Adam Turnquist (00:18):

I should be. I got some slippers on, but still a little cold here in Green Bay, negative 12 this morning, and it doesn't look like it's warming up much. So it'll be inside today.

Jeffrey Buchbinder (00:29):

Yeah, don't take the laptop outside. On the, on the patio, it's an indoor workday for sure. <Laugh>. I thought it was cold in Boston and we hit like four degrees five degrees overnight, but we're up into the teens now and after hearing what you're dealing with, it makes me feel warmer here, <laugh>. So we'll go with the sweater still to stay warm. It is Tuesday, January 21st, 2025 as we're recording this, so far positive week for markets. Some green on the screen this morning. Here's our agenda for today. We're gonna recap the market last week. Hey, best week since November. Certainly ahead of the inauguration we've got some good inflation data, which helped and pretty good start to earning season. Next Adam will give some technical takes and then highlight some of the years in the past that looked like 2024 to see if that tells us anything about 2025 preview earnings.

Jeffrey Buchbinder (01:33):

I mean, most of the banks, the big banks are done, but we'll preview the rest of earning season and then finish up with a preview of the week ahead, which is a very slow economic data calendar. So getting to it. Here is the performance table. You can see here the S&P 500 up almost 3% for the week, even better for the Dow. And even better than that for the Russell 2000 up 4%. So very risk on week. Clearly. I mentioned Adam, that you know, that there's a little bit of I dunno, we'll call it Trump trade policy lift. I think especially since on Friday we were strong and, and now President Trump and President Xi from China actually held a phone call, which people perceived as positive for U.S.-China relations. But I think it was really the CPI. What do you think? What else was at work here?

Adam Turnquist (02:34):

I think it was a celebration of the disinflation theme in some of the animal spirits, we'll call it, returning to the market after getting shook out a little bit, coming into 2025, some of the sentiment indicators that we follow reset started to rebound a little bit in the positioning data, but very broad-based buying pressure last week. This wasn't just a mega cap rally as we've been accustomed to, maybe in the past. It was very broad. You had financials doing quite well on very solid earnings. I know we'll get into that in today's call. The equal weight S&P 500. So a measure of the average stock on the broader market outpaced the cap weighted by about 1%. So a good sign there. And I think you can see that broadening out theme with the Russell 2000 as you highlighted up 4% last week over the last five days. So an impressive rally overall, very risk on, and a good start going into well almost wrapping up January here, so for that January barometer that we're watching closely getting us back into the green last week as well.

Jeffrey Buchbinder (03:42):

Yeah, those January barometer stats are pretty compelling. <Laugh>, if you, you have an up January that really typically results in a much better year. I think the bank earnings is obvious as a reason why financials were up over 6% for the week, but energy not so obvious, that's probably more policy lift because oil and gas prices were actually down last week. What do you make of that, Adam?

Adam Turnquist (04:11):

I was surprised to see the, the energy rally given some of the, call it choppiness in the underlying commodity market. WTI had some enthusiasm and a rally on, on U.S. Sanctions on Russia exports. That fizzled out a little bit, I think as we go into this week. Of course, you heard now President Trump talked about drill, baby drill, and he did do some revoke some regulation on offshore drilling as well. So that's weighing on the supply side and you're seeing a little bit of weakness there. But I think for the energy market overall, when you think about the efficiency and the lift rates that we've grown to, they can be profitable at, at lower oil prices than, you know, $75 a barrel where WTI is trading. So hopefully that's you know, helping the sector overall. And of course, as we've talked about, just the sector being a lot more capital disciplined over the last several years, that's been a big shift there. They're more shareholder friendly with buybacks and dividends helping support the space.

Jeffrey Buchbinder (05:15):

<Affirmative>. Yeah, the, the figuring out the impact on policy on the energy sector is really challenging because you can have favorable policy drive oil prices down, but be good for energy sector profits. So I think that's probably what's going on here. As you suggest, the policy lift is kind of outweighing the maybe near-term pressure on oil prices turning to international markets. I mean, we saw some pressure in Japan, Adam you know, ahead of the BOJ meeting. And then we've actually seen European markets pick up a little bit. So, what are you seeing there?

Adam Turnquist (05:54):

Yeah, it's pretty impressive to see some of the European countries make new highs. Even the German DACs doing quite well against a backdrop of pretty poor economic data. When you think about Germany and their growth rates, I think there are negative growth in terms of GDP for two years straight, but of course that raises the expectation for rate cuts from the ECB. We'll see how that plays out, especially in light of the Fed and how those two central banks diverge or converge on policy this year. Of course, the dollar backed off a little bit last week. I think that helps some of the European benchmarks or international markets as well. I think there's, going back to the policy, just a lot of uncertainty around what tariffs could come out with Trump taking office yesterday and what the impact is there. I think it's been so far so good in terms of the headlines, which it sounds like they're gonna be rolled out maybe less aggressive than originally anticipated.

Jeffrey Buchbinder (06:57):

Yeah, that's right. That's probably why we're getting the lift in in markets today. The reprieve of sorts in tariffs. I think you hit nail on the head that the rate cuts are coming in Europe from the ECB and they're gonna be almost certainly gonna be more aggressive than those that we get in the U.S. From the Fed. I also think you're probably less worried about tariffs. We'll get some tariffs in Europe, or at least some tough talk with tariffs, but you know, it's really China and maybe more so Mexico that you have to worry about probably at this point. So turning to the bond market, this is, you know, related to why certainly the stock market did so well last week, you get better inflation data. So what happens? Well, bond yields fall, so we actually got a 10 year yield move of about 15 basis points last week.

Jeffrey Buchbinder (07:53):

So that you see the five-day move in the bond market index of 1%. That's a big move. We had dug ourselves a hole, so we're now back to break even on the year for bonds. Here's the commodity markets that I mentioned. We talked about crude being down, natural gas prices being down, but that didn't slow the energy sector one bit. Anything here commodity? Actually the dollar is interesting, Adam, so maybe weigh in on that. The dollar was down last week, probably rate-related to the tariff reprieve,

Adam Turnquist (08:29):

Yeah. And certainly following interest rates lower with the dollar backing off, still support around 107, that marked the upper end of its prior range that it was stuck in for the last two years. And I think it's really gonna be interesting as earning season ramps up to hear what corporate America has to say about the dollar. What's the impact of this latest move? We've had a pretty big rally in the dollar. If you go back to even the September lows going from, call it a hundred to now trading at 108. I look back at prior earning seasons over the last several years and looked at how many times corporate America, the C-suite was mentioning the dollar on their earnings calls. And no surprise, Q4, 2022 when the dollar hit over one, I think right around 114, 115, that was peak dollar commentary from the C-suite talking about headwinds from the dollar.

Adam Turnquist (09:23):

I'm not sure if we'll get that quite yet, but certainly could impact S&P earnings a little bit when you think about around 40% of revenues come from abroad. So as those dollars get, or global sales get repatriated into dollars, that tends to weigh on earnings. It's something we'll be watching closely here. And then on the other aspect of the dollar, you have to talk about gold here a little bit, really doing quite well against a pretty challenging macro backdrop. When you think about a rising dollar rising real yields gold still trending higher, getting close to a breakout from this shorter term consolidation range. The number we're watching technically is 27 21. That would, that would validate a breakout to the upside of that range and likely extend this rising price channel gold's been in for the last couple of years now.

Jeffrey Buchbinder (10:13):

Yeah, gold's been impressive, the way it's rallied in a strong dollar environment. But remember it's also rate sensitive. So as yields go down that can be support. So thanks for that, Adam. Let's get into your technical takes and 2024 analogs. This is really interesting. So you took a look at the path of the, of the stock market and looked at what years in history are most correlated. So why don't you start with the S&P 500, then we'll get into the analogs here in a little bit.

Adam Turnquist (10:45):

Yeah, when you look at this chart, it might look like an outlier, especially when you think of last year, very limited drawdowns, a lot of record highs and kind of a hockey stick up into the right chart formation on a near term basis. Things got a little bit questionable, we'll call it, going into 2025. You can see what we call a head and shoulders top formation. It's a shorter term pattern. Luckily, this latest rebound we got back above the neckline. That's key to those head and shoulders patterns. You need to break below the neckline for that to be valid. So made some technical progress last week back above the 20 and 50 day moving averages. Now only about a hundred points off from record high territory with pretty good momentum. On the bottom panel. We have the percent price oscillator, won't get too far into the weeds there, but just measures the relationship between two moving averages.

Adam Turnquist (11:38):

That's now back into a buy position after really hitting oversold levels just last week and breath starting to expand, you can see that in the middle panel, the percentage of stocks above their 200 day, about 61%, and I'd like to see that get back above the prior lows of 2024. So 63% is the number there that would get it back in its range. And importantly, above a back tested level that shows better forward 12 month returns. That's the threshold right around 62, 63% where you start to get incremental better returns, at least based on historical back testing. So breath expanding, not quite there yet. Momentum looks better. And now we're making some technical progress. So to measure if this latest dip is over, I think the odds are now favoring that, especially when you think about the macro backdrop yields breaking down through some key support levels as well.

Jeffrey Buchbinder (12:34):

Yeah, nice to see that breadth improve because I know, as you've discussed in the past, Adam, when you have fewer than 50% of stocks above their 200-day moving average, that tends to signal weaker future returns.

Adam Turnquist (12:47):

Yeah. And at 62% the average or better, the 62 to 72% range on that breadth metric. The average 12 month return for the S&P is about just over 9%. And when you start getting below that 50% threshold, that's when you start to go negative. I think average 12 month return there around negative 7% going back to 1990. So a big contrast when you try to quantify breadth here from where we were headed to where we're now expanding to.

Jeffrey Buchbinder (13:16):

So we want a strong January and strong breadth. So let's get into your analogs here. This is really interesting stuff. So several years look quite a bit like 2024. And I guess the goal is to tell us what it might say about 2025.

Adam Turnquist (13:33):

So, as you know, strategists, we are always trying to find analogs, looking at history to give us some edge into maybe what could happen in the future. As technicians, we do the same. We use chart formations as a head and shoulders pattern developing. We talked about that on the S&P, what are the implications there? But I thought it was interesting to do more of a statistical approach and instead of subjectively look at the market, let's quantitatively look at the market and run a correlation analysis. So we looked at the price progression of the S&P for 2024, and then we compared that to every single year, going back to 1950, using a correlation analysis over those periods. And here are the highlighted correlations across every single year. The ones in green are the highest correlated. So the correlation coefficients are greater than 0.9%, and as you'd see most of the bars, we'll call it, or at least more than half are blue, no surprises.

Adam Turnquist (14:33):

The market tends to be higher or has been higher over the last 70 plus years. But when we start breaking these down a little bit more on the next chart to provide a little bit more context around the macro environment, trying to really triangulate around what years really resemble last year. And I, I think you can make the case 1958 and 1995 are probably the closest. This might be a bit of a stretch, of course when you're looking at macro environments. But as you can see, those years had pretty good returns. You're up 20% in 1996 and then 1959 you're up 8.5%. Fed funds rate during those periods moving lower. The 10-year treasury yields were moving lower in 1995, kind of a mixed bag in 1958. They were higher. Part of that was due to transition out of a recession, but inflation trending lower and then no recession the next year.

Adam Turnquist (15:33):

So I guess you can pick your path. There's also 2021 on here. We'll talk about that a little bit. And of course we know 2022 a, a very weak year for the broader market as we rolled into a bear market. And as you look at some of the price progressions moving from 1995 to 1996 and 1958 to 1959, I think we have that on the next chart just to show the trajectory of these years. And on the left you have 2024 that that vertical line marks the transition to 2025 and both of the prior analogs, so 1995 and 1958 going into their, the following year, both had call it four to 5% dips as the year started, 1995, 1996. That period in January looks very similar to right now. We've had a very similar draw down on the S&P 500.

Adam Turnquist (16:31):

What stood out when we looked at 1996, we had this pretty notable rebound into, or really in the first quarter. And then stocks really did nothing. It's just sideways price action in that bright blue line really until September. And that's where the gains of 1996 really came from. That back half weighted or really Q4 weighted type returns. Both experienced some volatility as well. But I think overall, when you use these as analogs, a pretty constructive backdrop and it really does suggest maybe some of the momentum that we witnessed, even though it was outsized momentum could continue into 2025. We did have 2021 on there as a high correlated year. Top panel is the S&P and white that's currently going back over the last year in blue, of course is the S&P during 2021, 2022. Little bit different macro backdrop, of course with the Fed. But when you look at some of the, the macro factors including yields in the middle panel, those are moving higher as they are now dollar also moving higher and breaking out. But I do think going back to the context is key line, we have to consider what the Fed was doing then versus now. So I kind of discount the 2022 analog, given the vast difference in what the Fed is expected to do this year.

Jeffrey Buchbinder (17:58):

Yeah, the macro environment looks much more similar to the mid to late nineties. That's also the last time we got back-to-back 20% up years in the S&P 500.

Adam Turnquist (18:09):

Yeah. And a soft landing <laugh>, right,

Jeffrey Buchbinder (18:11):

And a soft landing. And we had a big tech boom with the internet development. Obviously the tech development today is different, but it's still a tech boom. I'll say I'm not gonna predict 20% up year in the S&P 500 again, but those similarities look pretty compelling.

Adam Turnquist (18:31):

Yeah, certainly. So we'll see how it plays out. I think that'd be a welcome analog for investors just given the indications or implications I should say, of the mid-nineties rally that we witnessed in the S&P and I don't think we're quite there in terms of AI and the internet maybe, but certainly momentum favors further upside here for the S&P.

Jeffrey Buchbinder (18:54):

Yeah, it's also pretty clear that we're still early innings in AI. So speaking of AI, the Mag Seven has a lot of AI in it. So what are you seeing here? Is the, are we getting any evidence of a rotation out of these big tech names?

Adam Turnquist (19:10):

Not enough for a technical call here. And this is the chart that, you know, when we looked at the dip going into the new year, we looked at really the Mag Seven names. It's roughly 30% of the S&P 500, what's the technical damage there? And there was really none. So as we highlight here, it's really hard to get too bearish on the market when leadership remains intact. And these big tech names are doing quite well, they got a little bit overbought, and now they're just kind of pulling back to their 50 day moving average on that equal weight Mag Seven index. So no real technical damage. And then in terms of the rotation, the bottom panel compares the equal eight Mag Seven to the equal weight S&P 500. It just broke out above the summer highs. Got a little bit overbought there on the relative strength, but still holding above support. So no real rotation signs at this point. We'll continue to monitor that as some of these names are still a little bit stretched. We've had some minor technical damage on a few individual names within the index. And of course, as we witnessed last week, some of the small caps and value names showing a little bit of strength, but not enough to make the technical call here for any leadership change away from big tech or the mega cap names.

Jeffrey Buchbinder (20:24):

Yeah, Apple among the Mag Seven has gotten some downgrades here recently. So that stock has been a little bit of an underperformer, but generally speaking these things are impressively holding up. So how about yields, Adam, you talked about a little bit before big move down, what technical levels should we be watching on the 10-year? I think we're at 458 now.

Adam Turnquist (20:47):

The big move last week, we broke back below the April highs at 474. That was really the last line of defense before we went up and retested those. October 2023 highs near 5%. So this pullback doing some damage here back below the 474 level, back below the 20-day moving average today. And really the next big level is gonna be four 50. That goes back to some prior highs this fall. We break that. You have your, your 50-day around 445 and then there's this uptrend that comes into play right around the 50-day moving average, I should say, developing uptrend. So those are gonna be the key levels to watch. You can see the relationship between stocks and bonds started to change as yields moved a little bit too high, too fast. That's the bottom panel comparing the correlation of the S&P 500 to the Bloomberg Treasury Index using price there.

Adam Turnquist (21:44):

So that relationship changed certainly watching that as well, where I think we hit the pressure point for yields and that's where things were just not as easy to absorb when we're talking about a 10-year north of 450 or 470 for equity markets. And as Lawrence Gillum, our chief fixed income strategist, has talked about, it's not just better than expected data as it was for last fall that was driving yields. It was a rising term, premium inflation expectations and then reduced Fed cut expectations, which are starting to come back a little bit over the last couple days.

Jeffrey Buchbinder (22:21):

Yeah, certainly. The 10-yield is one chart where we want technical damage <laugh>. So certainly a little bit of a short-term bias to yields. One thing that could push yields down is the sort of a reversal or a cooling off of the Trump trade enthusiasm, right? So clearly the market's been focused on, you know, higher dollar, higher yields, more deficit spending. History actually shows that a lot of these political trades, when new administrations come in, are they effectively take place at inauguration day or around inauguration day, and then they start to cool off. So if we get to a cooling off period of how Trump trades are moving that could help bring yields down. Obviously the inflation data will have something to say about that as well. So next up is banks. So this was a big headline last week. Good earnings as you mentioned, Adam, from the big banks. This chart looks like it's maybe got room to go higher. What do you think?

Adam Turnquist (23:25):

Earnings definitely brought buyers back into the space. You can see the, the bank index here, a little bit oversold right at this uptrend. Earnings kicked off, and that's where we had this pretty big rally off that support level. And it looks like we could go back and retest the 2000 early 2022 highs here. Momentum suggests this rally has more room to go. Banks have been a consistent outperformer as well. If you go back or look at the bottom panel, that's the ratio chart of the bank index versus the S&P 500. And you can see it's been in this rising price channel really since, call it June, July of 2023, and been very consistent in that uptrend. So look for some further upside. I was surprised by some of the commentary from a lot of the CEOs during their conference calls. You had, for example, JP Morgan, CEO, Jamie Dimon, talking about their business clients or corporate clients. Very excited about the new administration bringing deregulation. Of course, the bank itself is excited for deregulation. Something Jamie DImon's talked about. Same thing from Goldman, Wells Fargo, all talked about the administration, the incoming administration, and some of the catalysts there for not just their bank, but also their clients.

Jeffrey Buchbinder (24:41):

Yeah, absolutely. Better than expected interest margins, better outlooks there, better capital markets environment, a lot of good things for banks certainly happening right now. And that's being reflected in the charts. So that's a good segue to earnings. So I'm glad we put your bank chart last, Adam. So fourth quarterings preview is the topic of the Weekly Market Commentary for this week, which should be available on lpl.com by the time you listen to this podcast. We call it a mix of strong growth and policy uncertainty. You know, Adam, you mentioned that you know, a lot of the conference calls are gonna talk about certain, certain topics. Well, I think tariffs is probably gonna be right up there with the dollar as top topic on conference calls this season. Of course, it's very early and banks don't typically talk a lot about currencies, but we'll get a lot of tariff talk here over the coming weeks.

Jeffrey Buchbinder (25:42):

I think the, the main headline here is that strong growth is coming and it's probably going to continue through the year. Our forecast is for 9% earnings growth in 2025. So, we expect these estimates to come down a little bit, but we're very likely to get low teens earnings growth for Q4 once it's reported. We're very, very early still in in earning season, pretty much just getting the banks. But it gets going this week. The the growth sectors and financials are gonna be where the growth comes from by growth sectors, I mean tech comm services and consumer discretionary. See that here. And then you're gonna get some big drag from energy. Energy alone's gonna be a couple points of drag. So if we do, let's just say that companies hit estimates and we get 12% growth in earnings, half of that's probably gonna come from financials and about five points from big cap tech.

Jeffrey Buchbinder (26:46):

So that's, that's pretty much it. <Laugh>, right? I think a lot of attention is gonna be on the on the Mag Seven and on energy. Now we are gonna get a little bit of broadening out here. So you will get some contribution from, from other sectors certainly, but just not a whole lot. That story's gonna take time to play out over the course of the year. Dollar strength is going to be a drag. Tariffs are not going to be a drag 'cause they haven't been put in place yet. But that doesn't mean there's not a lot of uncertainty out there that management teams are gonna talk about. So this is the Trade Policy Uncertainty Index. It was created out of academia by folks named Baker, Bloom, and, and Davis. They you know, they created this, I think within the last decade, but they've essentially backed, you know, updated it going back further.

Jeffrey Buchbinder (27:41):

It essentially uses headlines in the media to measure uncertainty. And you see, back when Trump initiated tariffs the first time in 2018, 2019, this uncertainty index spiked. Well, we're not quite back there. There's less uncertainty now. We've seen this movie before, but there's still a lot of uncertainty about tariffs reflected in in the media. It's really I'd say the biggest area of uncertainty around policy right now in terms of markets. And then lastly, and then I'll see what, what you have to add to this, Adam. This is forecast consensus Forecast for 2025 earnings for the S&P 500. So right now consensus is around 272, that would be about a 13% increase. So we don't, we don't think we're gonna get 13 partly because of currency, partly because of tariffs.

Jeffrey Buchbinder (28:39):

We think we're gonna get something more like nine or 10, but there is absolutely upside if tariffs don't hit as hard as maybe we think they might. Or if the economy surprises the upside, which is certainly possible. We, we think GDP this year might only grow around 2%. There are a lot of really smart folks out there that think we could do better and we could. So those are two potential avenues to upside our forecast. So maybe we end up with something a little over 260 where we are but probably not quite to 272. Now, this earning season is gonna be important. It's always important how well estimates hold up, but it's gonna be especially important because valuations are so high, right? We're still a trade in at 22 times, 2025 numbers. That's a pretty rich valuation. So earnings need to come through to support that valuation making this earnings season really important. So any thoughts on any of that, Adam, or something on earnings maybe I didn't mention?

Adam Turnquist (29:38):

I think you nailed it on the valuation side, especially when you think about where rates are right now and the direction as we highlighted, they've been ramping up on, on interest rates and that tends to weigh on valuations as well, and it's really going to be an important earning season as you mentioned, they're gonna have to deliver. Seeing some of the numbers you have to question is, this as good as it gets with profit margin expectations and the double-digit earnings growth. But like you said, there's definitely catalyst for upside. I think it's just going to be a relatively high bar, but maybe some of the resetting of sentiment going into earning season could be constructive and will get actually rewarded for earnings beats. That hasn't really been the case, the last couple for certain companies, the last couple earnings seasons.

Jeffrey Buchbinder (30:25):

Yeah, that's key. You know, the market sometimes doesn't get too excited about beats because it expects them. So we'll see what's expected as we get further into the season. The week ahead preview you know, given that it's a slow economic calendar, Adam, I think a lot of people are gonna be focused on earnings, of course, a lot of people are also gonna be focused on any hints of policy moves coming out of the Trump administration. We're really only seeing executive orders on immigration and some on energy, which don't have a ton of, you know, market impact or economic impact right now. Markets are really most anxious about the tariff news, and we're not gonna get much on that probably this week. So we'll keep following the the headlines. So earnings is a focus and the Bank of Japan is a focus where we'll probably get a rate hike. Any thoughts on the calendar this week, Adam?

Adam Turnquist (31:23):

I think maybe the University of Michigan inflation expectation, that's kind of a sleeper report that tends to make headlines once in a while. Just looking at the shorter term and longer term inflation expectations, they did ramp up last month, and that contributed, I think when that was reported to some of the selloff we witnessed on a Friday, remember doing the AM call or Morning Call during that report. Otherwise, yeah, I think it's just gonna be slowly adjusting to the new administration and flashback to when I was on the sell side. I used to have on my Bloomberg a direct Twitter feed and any headlines from Trump because a lot of the commentary when he started moved the markets and you look at the tape and try to understand what's going on. And that tended to be my number one source for information on what was moving the markets. But I think we've become a little bit more acclimated to that backdrop and accustomed to President Trump's language around markets, tariffs, everything else. But it is gonna be another, it'll be interesting to see how it plays out, especially week one here and what rolls out in terms of some of the executive orders that he has already started on.

Jeffrey Buchbinder (32:37):

Yeah, it's hard to say that tariffs won't be as inflationary now because we're in a different inflationary environment than we were in in 2017, 18, right? So the tarriffs weren't really passed through then. Now they're probably gonna be bigger and it's gonna be harder in this environment to, you know, keep the CPI where it is, for example. So we'll see how it goes. We'll see how broad and deep the tariffs are. They will probably affect inflation data a bit, but how much at this point is really anybody's guess? So we'll keep watching those, those Twitter feeds and all the headlines about trade. It's not just important because of how it affects inflation. It's important because of the potential for retaliation. So we don't know where any of that goes either, but maybe you can take some solace in the fact that during Trump 1.0 a lot of the you know, the actual news was certainly significantly watered down from some of the talking points early on, which were used as negotiation stances. So keep that in mind as well. We still think this market can hold up pretty well here going forward, even amidst the trade the trade uncertainty. So we'll go ahead and wrap up there. Thanks Adam for jumping in this week. Thanks all of you for listening to another edition of LPL Market Signals. We will see you next time. Have a great week, everybody. Take care.

 

In the latest Market Signals podcast, LPL Research’s Chief Equity Strategist Jeffrey Buchbinder and Chief Technical Strategist Adam Turnquist provide technical analysis insights on last week’s market rally, identify some historical stock market parallels to 2024, and preview fourth quarter earnings season.

Stocks and bonds rallied last week on easing inflation and prospects for business-friendly policies from the Trump administration. Financials led on strong bank results while policy prospects bolstered energy stocks.

The strategists review the recent technical progress of the S&P 500, noting that broad participation was a key driver of last week’s rally. They explain that further expansion in market breadth could signal sustainable upside momentum. Additionally, they highlight several similar years to 2024 and discuss the history lessons these analogs offer for future returns.

The strategists then preview fourth quarter earnings season which got off to a strong start on solid bank results. They expect double-digit earnings growth, but several headwinds including currencies may limit upside.

The strategists close with a preview of week ahead including the first big wave of earnings results and a Bank of Japan policy meeting, where a rate hike is anticipated.

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May Lose Value

RES-0002689-1224 | For Public Use | Tracking # 685236 (Exp. 01/26)