To The Moon

It may be a new month, but Wall Street looks familiar. Stocks started February the same way they ended January, moving higher, supported by upbeat economic data and a packed earnings calendar.

On Monday:

• The Dow Jones Industrial Average surged 515 points, or 1.1%

• The $S&P 500(.SPX)$ gained 0.5%

• The Nasdaq Composite rose 0.6%

After a choppy open, stocks quickly found their footing as investors embraced signs that the U.S. economy may be regaining momentum.

Manufacturing Surprise Fuels the Rally

The biggest catalyst came from the Institute for Supply Management’s Manufacturing PMI, which jumped to 52.6 in January, up sharply from 47.9 in December. It marked the highest reading since mid-2022 and easily topped economists’ expectations of 48.9.

Earnings Season Delivers Mixed Signals

Earnings season continues at a brisk pace, with about one-third of the S&P 500 having reported. So far:

• Average earnings per share are up roughly 12% year over year

• However, fewer companies are beating expectations, leading to more muted, or even negative, stock reactions

High expectations, particularly for technology stocks, have raised the bar for results $Palantir Technologies Inc.(PLTR)$

Stocks

Still, optimism remains that the picture could improve as more sectors report.

Market Snapshot

• Dow Jones Industrial Average: +1.05%

• S&P 500: +0.54%

• Nasdaq Composite: +0.56%

• Hot stock: $SanDisk Corp.(SNDK)$ (+15.4%)

• Biggest loser: $Robinhood(HOOD)$ (-9.6%)

• Best sector: Consumer Staples (+1.6%)

• Worst sector: Energy (-2.0%)

What’s Next

Tuesday brings another heavy slate of earnings, including:

• $Advanced Micro Devices(AMD)$

• Merck

• $PayPal(PYPL)$

• PepsiCo

• Pfizer

• Super Micro Computer

Investors will also be watching the Job Openings and Labor Turnover Survey (JOLTS), with economists expecting 7.25 million job openings, slightly above November’s level.

Between strong economic data, evolving Fed leadership, and earnings expectations, markets appear content, for now, to relive January’s bullish script…

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

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