Here are the key things investors should know to start their week of trading:
1. Shortened Trading Week
During this week, the direction of stocks in the U.S. might be influenced by earnings and economic data. Goldman Sachs and Morgan Stanley will report their results on Tuesday. Also, keep an eye on the U.S. December retail sales data, scheduled for release on Wednesday.
This information will give insight into how consumers are doing and whether their spending decreased during the important holiday season. In the past week, the Dow Jones Industrial Average went up by about 0.3%, the S&P 500 increased by 1.8%, and the Nasdaq, which focuses on tech stocks, rose by 3.1%.
2. Banks Remain in Focus
Goldman Sachs and Morgan Stanley are the latest banks to share their quarterly earnings, continuing a series of varied results from different banks in the past two trading days. Goldman is particularly interested in showcasing strength in its main areas of investment banking and trading, shifting away from CEO David Solomon’s focus on consumer banking.
Last Friday, JPMorgan Chase and Bank of America reported lower profits in the fourth quarter, mainly due to significant one-time charges. In contrast, Wells Fargo announced an increase in earnings for the same period. Citigroup, on the other hand, reported a quarterly loss, citing various charges, and also revealed plans to cut 20,000 jobs as part of a large restructuring program.
3. It’s Trump’s Party
As anticipated, Donald Trump is expected to win the Republican presidential caucus in Iowa, marking the party’s first nominating contest for 2024. This outcome highlights Trump’s significant influence within the GOP and underscores the diminishing opportunity for his competitors to present a substantial challenge. With 99% of the expected votes counted, Trump secured around 51% of support, while Florida Gov.
Ron DeSantis had approximately 21%, and former South Carolina Gov. Nikki Haley had about 19%. Despite facing four criminal cases, including two linked to his attempts to overturn the 2020 presidential election, Trump’s legal issues did not deter many caucusgoers.
According to NBC News entrance polls, nearly two-thirds, or 64%, of respondents believed Trump could still be a fit president even if convicted, while 31% disagreed. Entrepreneur Vivek Ramaswamy exited the race and endorsed Trump after finishing fourth.
4. Musk’s Strategic Moves
In a post on X, the social media platform he owns, Musk mentioned, “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.” Musk had previously sold billions of dollars worth of Tesla shares to help fund a $44 billion acquisition of the platform formerly known as Twitter.
5. Robots Make an Entrance at Davos
At this year’s annual World Economic Forum in Davos, Switzerland, executives and politicians were greeted with a strong emphasis on AI. In the past, cryptocurrency companies took center stage at this gathering of influential figures from the corporate world, but this time, the spotlight shifted to AI.
From a structure called the “AI House” to advertisements proclaiming “The future is AI,” Davos highlighted the pervasive influence of technology in business strategy and marketing, particularly with the rise of generative AI and ChatGPT.
Corporate leaders will face significant challenges as they integrate AI into their operations. The International Monetary Fund (IMF) stated on Sunday that 40% of jobs worldwide could be impacted by this technology.
IMF Managing Director Kristalina Georgieva remarked, “We are on the brink of a technological revolution that could jumpstart productivity, boost global growth, and raise incomes around the world. Yet it could also replace jobs and deepen inequality.”
Keep an eye on earnings, economic data, and retail sales. Banks, especially Goldman Sachs and Morgan Stanley, are reporting mixed results. Donald Trump’s influence in the GOP remains strong, and Elon Musk aims for more control at Tesla. The World Economic Forum emphasizes AI, posing challenges and potential job impacts globally, as discussed by the IMF.