Welcome to the weekly UpCrypto Trading Newsletter.
Brief Overview
What Does Week 5 Bring?
Key economic indicators range from new home sales and consumer confidence to the Fed’s first rate decision of 2025, alongside important corporate earnings.
Weekly Market Wrap:
Markets reacted positively to Trump's inauguration. Bitcoin and the SPX reach new all time highs.
Earnings Highlights:
This week’s reports feature companies like SAP, 3M, Procter & Gamble, Microsoft, Apple, Visa, and Intel, providing a glimpse into consumer demand, industrial activity, tech performance, and payment trends.
What does week 5 bring?
Monday, January 27:
New Home Sales
A forecast of 0.67 million. This metric provides insights into the housing market’s demand and broader residential sector trends.Earnings Reports 📝
Earnings from AT&T Inc. (T), SoFi Technologies Inc. (SOFI), Nucor Corp. (NUE)
Tuesday, January 28:
Consumer Confidence
A reading of 106 is anticipated, offering a gauge of consumer sentiment and its influence on spending.Durable Orders
An increase of 0.8% is projected, indicating businesses’ willingness to invest in long-term capital goods.FHFA Housing Price Index, S&P Case-Shiller Home Price Index
Forecasts stand at 433 and 4.1%, respectively, signaling home price dynamics in the U.S.Earnings Reports 📝
Earnings from SAP SE (SAP), Boeing Co. (BA), General Motors Co. (GM), Starbucks Corp. (SBUX)
Wednesday, January 29:
FOMC Rate Decision
No change is expected, keeping the rate at 4.5%. This marks the first Fed meeting of 2025, where markets will watch for hints about future rate cuts or continued hawkishness.Earnings Reports 📝
Earnings from ASML Holding NV (ASML), T-Mobile US Inc. (TMUS), Microsoft Corp. (MSFT), Meta Platforms Inc. (META), Tesla Inc. (TSLA), IBM (IBM)
Thursday, January 30:
GDP – Advanced Read (Q4)
Consensus stands at 2.7%, though some expect 3%. This figure is pivotal for gauging Q4 economic performance.Initial Claims
225K is expected, higher than expected numbers would be positive because they speak against Powell's hawkish statements.Pending Home Sales
A reading of 4.0% is expected, reflecting contract signings in the housing sector.Earnings Reports 📝
Earnings from MasterCard Inc. (MA), Apple Inc. (AAPL), Visa Inc. (V), Intel Corp. (INTC)
Friday, January 31:
Chicago PMI
A value of 39.9 is projected; below 50 suggests contraction in manufacturing activity in the Chicago region.PCE Prices, Personal Income, Personal Spending
Forecasts around 0.2%, 0.4%, and 0.4% respectively, key indicators for inflation and consumer behavior.Earnings Reports 📝
Earnings from Exxon Mobil Corp. (XOM), AbbVie Inc. (ABBV), Chevron Corp. (CVX), Colgate-Palmolive Co. (CL)
Weekly Market Wrap Before the Outlook
The Week That Was
President Trump’s inauguration turned out to be very bullish for investors, with the S&P 500 adding nearly 2% over the week and closing at a new all-time high of 6,118. Contrary to fears of new tariffs, Trump unveiled multiple pro-growth initiatives including a potential $500B AI infrastructure investment called “Stargate AI.” While such projects could boost corporate earnings, they also carry inflationary risks down the road. Meanwhile, Treasury yields remained relatively flat, though 10-year yields are still up 100 basis points since mid-September, reflecting persistent concerns about inflation.
Crypto Update
Bitcoin soared to a fresh all-time high above $109K, bought by optimism over a “crypto-friendly” administration. Investors are hoping for a National Bitcoin Reserve.
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Crypto and Market Outlook for Week 5
Trump’s Inauguration
Expectations for a strongly pro-crypto announcement were high; instead, Trump focused on tariffs, global conflicts, and border control. Despite some disappointment, it appears his team invested over $100 million in crypto recently, hinting that more action could follow. The crypto market, though volatile, has held up surprisingly well.
Signing Crypto Executive Orders
Trump Says: He’s open to discussing rates directly with Powell.
Trump Expects: The Fed to align with his push for lower rates.
Crypto Executive Order: A newly formed working group to explore digital asset regulation and growth.
Digital Asset Stockpile: Reports indicate plans for a national digital asset reserve, potentially including Bitcoin.
These developments have fueled market optimism, but participants await confirmation of an official national Bitcoin reserve. The possibility remains that such announcements could spark a major shift in crypto’s macro trendline.
Market Sentiment & Current Dynamics
Despite the positive tone, crypto markets have experienced high volatility and remain in what some call a “no-move” zone, reflecting anticipation of a significant catalyst. Any breakthrough regarding a Bitcoin reserve could send prices higher, but for now, patience and caution are key.
SPX Reaches New All-Time High, Dollar Weakens
The S&P 500’s new ATH underscores robust risk-on sentiment, propelled by Trump’s pro-growth comments and a weaker dollar. Should the greenback remain under pressure, both stocks and crypto stand to benefit, although the lack of concrete news on a Bitcoin reserve has capped crypto gains so far.
Conclusion
Outlook for Next Week
Although the market looks near-term overbought, no immediate pullback is guaranteed. Potential catalysts include the Fed’s upcoming FOMC meeting, big-cap tech earnings, and PCE inflation figures on Friday, all likely to drive higher volatility. A “slightly bearish” tilt remains possible if yields rise or if earnings underwhelm after recent rallies. However, strong top-line results from big tech or further yield pullbacks could push stocks into new record territory.
Takeaways:
Pro-Growth Policies may continue to lift equities, but inflation risks remain.
Crypto stands ready for a bigger breakout if Trump’s rumored national Bitcoin reserve materializes.
DCA Approach: Elevated volatility justifies a cautious, incremental positioning strategy.
Traders should keep watch for any announcements on digital assets and stay disciplined amid the ongoing market fluidity. As always, we will provide continuous updates and analyses.
Here's to a successful week, and stay tuned for more weekly outlooks on the crypto and financial markets.
Best regards,
your UpCrypto Team!
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