This week’s stock market review covers major earnings from Google, Amazon, and Palantir, alongside key trades and portfolio adjustments. Find out why I trimmed Oracle, added Nvidia, and exited Adobe while assessing market risks for the upcoming week.
#StockMarketUpdate #EarningsSeason #PortfolioStrategy
The first full week of February brought intense market volatility, earnings surprises, and shifting economic sentiment. In this post, I’ll break down key earnings reports, my portfolio changes, and a risk assessment for the upcoming week.
1. US Stock Market Slumps Amid Inflation and Tariff Fears:
Wall Street experienced a downturn this week, as worries about persistent inflation and potential new tariffs resurfaced. The S&P 500 fell by 0.9%, erasing earlier gains and marking one of the worst drops for the index in the young year. The Dow Jones Industrial Average also sank by 1%, while the Nasdaq composite led the losses with a 1.4% decline, dragged down by a sharp fall in Amazon's stock despite exceeding earnings expectations.
2. Mixed Global Market Performance:
While US markets struggled, Asian shares saw gains, with Japan's exports hitting a record high. However, the country continued to grapple with a trade deficit. European markets traded mixed, reflecting a cautious sentiment amid global uncertainties.
3. Fed's Interest Rate Outlook Remains Uncertain:
The Federal Reserve's stance on interest rate cuts remained a key point of discussion. The Fed began cutting rates in September 2024 to ease economic pressures. However, it indicated a potential slowdown in the pace of cuts for 2025. This was due to concerns about stubbornly high inflation. This divergence in expectations between the Fed and some Wall Street traders contributed to market volatility.
4. Amazon's Stock Falls Despite Earnings Beat:
Despite reporting better-than-expected earnings for the last quarter of 2024, Amazon's stock fell by 4.1%. Investors focused on the company's revenue forecast. It fell short of analysts' expectations. This highlights the importance of forward-looking guidance in market valuations.
5. Homebuilders Take a Hit:
Homebuilder stocks experienced significant losses, with D.R. Horton and Lennar sinking by 5% and 4.2%, respectively. The prospect of fewer interest rate cuts by the Fed raised concerns about potentially higher mortgage rates. This change is impacting the housing market outlook.
6. Expedia Group Soars on Strong Travel Demand:
In contrast to the overall market trend, Expedia Group's stock leaped by 17.3% after reporting strong profits for the last quarter of 2024. The company cited robust travel demand. It announced the reinstatement of its dividend for investors. This signals confidence in the travel industry's recovery.
1. Key Earnings Reports & Market Trends
Palantir (PLTR)
Earnings: Strong beat on revenue & profitability.
Stock Movement: Up 40% this week.
Outlook: While fundamentals are improving, valuation remains stretched (100x+ future sales).
Google (GOOGL)
Earnings: Good revenue growth, strong cloud business.
Stock Reaction: Dropped 6.7% despite solid earnings.
Key Issue: High valuation and lack of a "wow factor" in the report.
Amazon (AMZN)
Earnings: Beat expectations, but stock still fell ~3.5%.
Key Reason: Investors wanted stronger guidance.
Other Earnings Highlights:
AMD: Disappointing performance, impacting my portfolio negatively.
Disney & PayPal: Weak reports, both stocks fell.
Expedia Group: Surged 17% post-earnings, but too risky for entry.
UPS & Hershey’s: Poor performance led to quick trades.
2. Portfolio Adjustments
Exited Positions
Adobe (ADBE): Lack of innovation, competitive pressure from Canva.
Palantir (PLTR): Trimmed after a 40% rally, still holding 2.43%.
Oracle (ORCL): Reduced to 0.72%, awaiting TikTok-related news.
Added to Positions
Nvidia (NVDA): Increased to 4.46% on pullback. Considering selling at a limit order.
Google (GOOGL): Now 4.15%, but currently down 6.7%.
Cash Holdings:
8.95% of my portfolio, aiming for 15-20% by April to hedge against risk.
3. Risk Assessment for Next Week (Feb 10 - Feb 16, 2025)
Economic Events:
Monday: No major events (potentially stable trading).
Tuesday: Fed Chair Powell testimony.
Wednesday: Inflation Report (Core CPI).
Thursday: Producer Price Index (PPI).
Friday: Retail Sales Report.
Market Sentiment & Indicators:
S&P 500 RSI: 50.54 (Neutral, room for movement).
MACD: Signaling a bearish trend—potential further downside.
Earnings Impact: Remaining reports include McDonald’s, Coca-Cola, CVS, Cisco, Robinhood, Deere, Honda, and Sony.
Overall Market Risk: Medium-High
Earnings season buyback window opens, potentially stabilizing markets.
Inflation & Fed updates could trigger volatility.
Watching Brookfield closely for investment opportunities.
Final Thoughts
Markets remain volatile, with uncertainty around interest rates and tech stock valuations. While Nvidia and Google remain key holdings, I’m cautious about risk and raising cash levels.
What’s your strategy for February? Let me know in the comments!
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