Daily Commentary: January 30, 2025

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News Cycle Was A Dud

Posted by Pete Stolcers on January 30
www.oneoption.com

The table was set for a big move one way for the other and here we sit.

PRE-OPEN MARKET COMMENTS THURSDAY – A few weeks ago I was watching the price action and we had good movement both ways. Buyers and sellers were able to move the market and there was a “window” setting up. Yesterday the FOMC Statement was released and we had a major round of mega cap tech earnings. This morning we got our first look at Q4 GDP. This news had the potential to move the market higher or lower. Unfortunately, this has turned out to be a great big “nothing burger” and the last big piece of news will come from Apple after the close.

The Fed said that job growth is stable, economic activity is good and inflation is acceptable. They are happy with their current policy and they don’t see any need to change. The market is pricing in a rate cut in June. This is largely what the market expected so the reaction was muted.

META, MSFT and TSLA reported after the close and the net affect of all three hasn’t moved the market needle. Let’s see if AAPL does after the close.

Advanced GDP came in at 2.3% and that was lighter than expected (2.7%). That release did not spark a reaction. Real GDP (inflation adjusted) was flat. In aggregate, EU GDP was negative (-.1%). Initial jobless claims were 207K and that is actually a strong number and it bodes well for next week’s jobs report. I was expecting a higher number.

According to Trump’s most recent press conference, he plans to move ahead with tariffs on Canada, Mexico and China starting Saturday. Traders either don’t believe he will follow through with it or they are completely discounting the impact of a trade war. These are our largest trade partners. I believe that he will follow through and that surprise favors the downside.

The market is trapped in a horizontal trading range and it is comfortable here. The volume is terrible and Asset Managers aren’t enthused or fearful.

There’s been a lot of news to digest in the last 24 hours and I expect to see some movement today. The range on Tuesday was very wide and we are likely to stay in it. Watch to see if one side or the other can make progress to one extreme or the other. My guess is that the market will still be waiting for a catalyst.

The range from Tuesday will act as support and resistance.

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