Market Analysis for February 19, 2025

Weekly Recap

Last week marked significant volatility in the stock market as the S&P 500 closed down 1.5%, largely influenced by mixed earnings reports and rising interest rate concerns from the Federal Reserve. Major tech stocks like Apple and Microsoft reported weaker-than-expected earnings, sparking sell-offs. Meanwhile, energy stocks saw some gains amidst continued geopolitical tensions in Eastern Europe, driving oil prices up.

Key Events Last Week

1. Earnings Reports: Major companies, including Amazon, Tesla, and Alphabet, posted varying results, causing fluctuations in their stock prices.
2. Federal Reserve Commentary: Fed Chair Jerome Powell’s comments on possible interest rate hikes led to increased market anxiety about inflation control.
3. Geopolitical Tensions: Russia’s military movements near Ukraine continue to raise concerns about potential escalations, impacting global markets.

Looking Ahead

In the coming days, investors will be watching:

• Consumer Price Index (CPI) data set to release on February 21, which could provide insights on inflation trends.
• Federal Reserve Meeting Minutes scheduled for February 22, expected to shed light on future monetary policy.
• Ongoing earnings season with notable companies like Walmart set to report on February 23.

Recommendations

Buy:

• SPDR S&P 500 ETF Trust (SPY): A good long-term hold; consider purchasing on dips aggregate losses from last week.
• Vanguard Total Stock Market ETF (VTI): Diversified exposure is essential during volatile periods; accumulate shares.
• Exxon Mobil Corporation (XOM): With rising oil prices and strong demand forecasts, this stock appears well-positioned for growth.

Sell:

• Apple Inc. (AAPL): Given its recent earnings miss and potential headwinds, investors may consider profit-taking on any short-term rallies.
• Zoom Video Communications (ZM): Valuation concerns and decreasing demand post-pandemic health measures suggest it may be prudent to reduce positions.

Conclusion

Investors should maintain a cautious approach amidst current market conditions. With key economic indicators on the horizon, it’s essential to remain adaptable and keep a close eye on market reactions. Focus on long-term fundamentals while being ready to act based on short-term developments.