Week ending January 10th, 2025
From Wall Street to Main Street
Highlights from the past week
| Market / Macro Economic Summary Markets got some economic data this week that sent investors questioning how many rate decreases we might get from the Federal Reserve in 2025. U.S. jobs growth surged to 256,000 in December, easily outpacing Wall Street's estimates, while the unemployment rate unexpectedly dropped to 4.1%. Analysts had expected jobs growth of around 150,000 and steady unemployment, but today's data could underpin inflation concerns and strengthen ideas that the Federal Reserve might pause rate cuts. Treasury yields quickly jumped to new one-year highs, hurting major indexes. I remind clients that despite the markets dropping in the short term due to this stronger economic activity, this is a long-term positive impact. This means the economy is doing very well and the foundation is being set for more growth. Company Specific / Micro Economic Summary Walgreens Boots Alliance (WBA) Shares added 24.73% ahead of the open as earnings and revenue both came in above Wall Street's estimates for the quarter, helped by growth internationally and in the U.S. retail pharmacy business. Earnings per share of 51 cents handily beat expectations of 38 cents. Revenues of $39.5 billion also exceeded the calls for $37.4 billion. New CEO Tim Wenworth said the company saw disciplined execution towards operating costs controls, improving cash flow and addressing changes to reimbursement models. Walgreen’s also maintained its fiscal 2025 guidance. Delta Airlines (DAL) Shares jumped 9.79% as the airline carrier delivered a top and bottom-line beat. Earnings per share of $1.85 exceeded the estimates of $1.74. Revenues of $15.6 billion also came in stronger than the expectations of $14.5 billion. CEO Ed Bastian said demand remains strong and expects $4 billion in free cash flow in 2025. “We're going to continue to grow the fleet,” Bastian said. “We have roughly 40 new airplanes entering the fleet. We hope to be able to see — maybe by the end of this year, or the early part of next year — the launch of the Airbus 350-1000, which will be the newest flagship product in the sky.” |
| Parting Thoughts We started earnings season and we should see heightened activity in the coming week. We welcome an opportunity to discuss the above detail and wish you much success in the rest of your week! Regards, Erick J. Palacios, MBA Wealth/Fiduciary Advisor |