Weekly Roundup Jan. 11-17
ECONOMIC REPORTS | FINANCE EARNINGS REPORT | TRUMP ADMIN PLANS
By: Lorenzo Alfonso
Jan. 19, 2025
The Economy at a Glance
Equity markets were mixed this past week as we move further into the start of earnings season. We will discuss more on this later in the article.
As mentioned last week, the key report investors were watching was the CPI report. The December 2025 CPI showed no change from November, holding steady at a 2.7% inflation rate. Core CPI, which excludes food and energy costs, increased 0.2% month over month and 2.6% year over year.
Due to the government shutdown, we also received a delayed Producer Price Index (PPI) report. The November 2025 PPI showed producer prices rose 0.2% month over month and 3.0% year over year, up from 2.8% in the prior month.
The Census Bureau reported that consumer spending was stronger than expected in November. Retail sales rose 0.6%, beating estimates of roughly 0.4%, and rebounding from a slight decline in October. However, growth in control-group sales, which exclude certain categories and feed into GDP calculations, slowed to 0.4% from 0.6% the prior month.
Housing data surprised to the upside during the week. On Tuesday, the Census Bureau reported that sales of new single-family homes for October came in at a seasonally adjusted annual rate of 737,000. While this was lower than the prior month, it exceeded expectations of around 725,000. Existing home sales also rose 5.1% in December to a SAAR of 4.35 million, well above estimates of 4.18 million.
Mortgage rates continued their recent downward trend, with the average 30-year rate approaching 6% by the end of the week. This reflects the impact of recent interest rate cuts now working their way through to homebuyers.
Earnings Reports
JPMorgan Chase, Bank of America, Wells Fargo, Citi, Morgan Stanley, Goldman Sachs, and BlackRock officially kicked off fourth-quarter earnings season. As expected, results across major financial firms were mixed.
JPMorgan Chase began the week with markets reacting cautiously. Shares of Citi and Morgan Stanley fell after reporting declines in quarterly profits, while Morgan Stanley and Goldman Sachs rose after posting results that exceeded analyst forecasts.
Trump Administration Announcements
Credit Card Rates
The Trump administration has reiterated two major affordability themes aimed at working-class Americans, which were central to the president’s campaign. Over the past week, President Trump proposed a one-year cap of 10% APR on credit card interest rates.
For context, average credit card rates today are around 24%, with subprime borrowers often paying closer to 36%. Analysts estimate this proposal could save consumers up to $100 billion per year in interest payments. However, banks would likely respond by tightening credit access and lowering limits for lower-credit-score borrowers.
It is important to note that this proposal is not finalized. There is currently no clear legal path for the president to impose an interest-rate cap without congressional approval, and significant debate remains around how such a cap would be structured and enforced.
“Great Health Care Plan”
President Trump also announced a proposed framework for a new health care plan. The plan is not official or finalized but outlines several policy goals aimed at reducing health care costs without cutting Medicare or Medicaid.
The administration highlighted four primary themes: drug pricing reforms, insurance market changes, greater price transparency from providers and insurers using plain language for consumers and expanded anti-fraud protections. Further details and legislative steps have yet to be released.
Looking Ahead
Markets will be closed Monday in observance of Martin Luther King Jr. Day.
Key reports scheduled for the upcoming week include construction spending from the U.S. Census Bureau, pending home sales from the National Association of Realtors, and the Personal Consumption Expenditures (PCE) price index from the U.S. Bureau of Economic Analysis.
Have a great first week of classes, Rams, and start the semester strong!
Glossary
Core CPI
This is CPI without food and gas, because those prices jump around a lot. It helps see longer-term trends.
PPI (Producer Price Index)
This looks at prices before things reach the store — what companies pay to make stuff. If this goes up, consumer prices may rise later.
Retail Sales
This measures how much people are spending at stores. More spending usually means the economy is doing okay.
Control Group Sales
A “cleaner” spending number used to calculate economic growth. Economists care about this one more than headlines.
GDP (Gross Domestic Product)
This is the total value of everything a country makes. It’s like the economy’s report card.
Seasonally Adjusted Annual Rate (SAAR)
A way to smooth out holidays and weather and show what would happen if the current pace lasted all year.
Mortgage Rate
The interest you pay to borrow money to buy a house. Even small changes can affect monthly payments a lot.
Earnings Season
The time when companies report how much money they made. Stocks often move a lot during this period.
APR (Annual Percentage Rate)
The yearly cost of borrowing money, including interest and fees. Higher APR = more expensive debt.
Federal Reserve (the Fed)
The group in charge of interest rates and keeping inflation under control. They don’t work for the president.
Shutdown-Delayed Data
Economic reports that were released late because the government wasn’t fully operating.
