Wall Street Horizon

Banks blew Q1 earnings expectations out of the water, benefitting from high trading volumes, but CEO commentary remains cautious for 2025.

Q1 earnings season is about to kick off amidst what some might consider to be the most uncertain environment for US corporations since the COVID-19 pandemic.

Investors just can’t get enough of ETFs, and issuers are more than happy to oblige. Through the middle of last week—still with a handful of days left in the quarter—208 new U.S. ETFs were launched in Q1, according to Wall Street Horizon data.

Last year was a record for S&P 500® stock buybacks, led by the now “Lag 7” companies, though the SPX buyback yield dropped to a 2-year low.

With only eight trading days left in the first quarter, M&A announcements are set to come in at their lowest level since Q2 2020.

March came in like a lion, much to the bears’ delight. The S&P 500® plunged from its February 19 high on the heels of stern tariff talk and phrases like “a little bit of an adjustment period” from President Trump and the economy entering a “detox period,” as Treasury Secretary Bessent said last week.

Volatility is back in town. Tariff jitters and concerns about growth and inflation have resulted in an S&P 500® dip and the Cboe Volatility Index (VIX) jumping above 20. Investors grapple with a very sanguine backdrop painted by the fourth-quarter earnings season and policy uncertainty.

The fourth quarter 2024 earnings season more-or-less wraps up this week with the final trickle of retailers coming in, as well as the highly anticipated report from Nvidia which was out yesterday afternoon.

Earnings season is winding down, and the spotlight will soon shift toward 2025 trends after an impressive end to last year.

Tech results last week were more anticipated than usual due to the emergence of Chinese AI startup DeepSeek in the prior week.

January is in the books, and markets are still waiting on a big rebound in the dealmaking space. Investors rooting for increased M&A and a flurry of IPOs will have to be patient as Q1 tracks with continued low counts on both fronts.

The Magnificent 7 kicked off fourth quarter reporting in a similar fashion to the Q3 season. Tesla once again missed expectations when they reported on Wednesday, on both the top and bottom-line this time (vs. only missing on revenues in Q3), yet investors seemed unbothered.

Big US banks marked the beginning of the Q4 earnings season when they released results last week, and overall they were positive. Because of their position opening up the earnings season they tend to set the tone for things to come.

Something unusual came down the chimney late last year. During the holidays and the preceding weeks, there were a slew of splits among US ETFs – the most in the past four years, according to Wall Street Horizon’s data.