Good evening. The S&P 500 ended the week down -1.9%. Here are the top stocks to watch this week, and what’s moving the markets.

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Top Stocks & Setups To Watch This Week

• $AAPL
Break above 242.70 🎯 247.24 & 250.42
• $OXY
Break above 52.69 🎯 53.91 & 55.24
• $TSLA
Break above 409.73 🎯 427.93 & 450
• $WFC
Break below 68.61 🎯 66.40 & 64.68
• $PYPL
Break above 86 🎯 87.94 & 90.09
• $CAT
Break below 347.96 🎯 340.35 & 333.68

KV’s S&P 500 Levels

Weekly Market Recap

Resilient Economy

The U.S. and Canadian economies enter 2025 on solid footing, with positive GDP growth, easing inflation, and supportive labor market trends. December labor data exceeded expectations in both nations, with wage gains outpacing inflation, fueling consumer confidence. While higher bond yields triggered short-term stock declines, the broader bull market remains intact, supported by robust earnings growth and resilient economic activity.

Rate Expectations

Positive job reports in the U.S. and Canada prompted markets to reassess expectations for central bank rate cuts. Futures now suggest limited rate reductions in 2025, driving bond yields higher and pressuring high-valuation stocks, particularly in tech-heavy indices. However, a diversified investment strategy, balancing growth and value assets, remains key to navigating market shifts and capturing opportunities in the evolving rate environment.

Political Uncertainty

As the U.S. prepares for policy changes under President-elect Trump and Canada navigates Trudeau's resignation, political uncertainty looms. Markets may react to shifts in trade, tax, and economic policies, but history shows that fundamentals like earnings growth, a solid labor market, and moderated central bank policies are primary market drivers. Investors should focus on diversification and rebalancing amid potential volatility.

Coming Up…

Important economic releases this week include CPI inflation for December and retail sales data. On the earnings front, JPM, TSM, C, UNH, WFC, BAC, and MS are expected to report this week.

Key Headlines We’ve Been Reading

This is what’s caught our eye over the past 7 days.

• How OpenAI’s Sam Altman is thinking about AGI and superintelligence in 2025.
• Trader who made billions in 2008 returns to bet on market swings.
• China pushes back against Yuan weakness after last week’s slide.
• German dream of becoming a global chip superpower is fading fast.
• Trump ramps up threats to gain control of Greenland and Panama Canal.

Trading Quote Of The Week

That was it for this week!

Stay safe,
KV 👋

Week #2 | January 12, 2025

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