MarketBeat Week in Review – 01/27 - 01/31

Stocks wrapped up the week with modest gains, bouncing back from a significant sell-off on Monday that was driven by concerns surrounding China’s DeepSeek open-source API. Despite these worries, the tech-heavy NASDAQ emerged as a potential leader among the stock indices, bolstered by strong earnings reports from several key technology companies. Investors appear optimistic, reassured by growth prospects in the tech sector.

Additionally, market participants seem unfazed by the latest inflation data. The January reading of the Personal Consumption Expenditure (PCE) index indicated that inflation remains around 2.6%, aligning with analysts' forecasts. This figure suggests that the chances of impending interest rate cuts are low, as inflation continues to hover above targets, fueling a cautious outlook on monetary policy.

The upcoming week is set to be bustling with earnings reports, and many investors, including those with MarketBeat, will be watching closely for updates from companies like Eli Lilly & Co. and Palantir Technologies Inc.. Moreover, there will be a keen interest in the manufacturing data for January, which is expected to provide additional insights into the inflation trajectory.

Insights on Turnaround Stocks

This week, investment expert Jea Yu focused on identifying undervalued stocks that could make a rebound, listing three “turnaround” stocks that are currently economically alluring but may see appreciation as the market recognizes their growth potential.

Future of Energy Stocks

Looking at the energy sector, analysts predict a strong performance throughout the year, with an emphasis on oil services companies rather than traditional oil giants. Jea Yu discussed how Schlumberger Ltd. is positioned for growth, attributing part of this to advancements in AI integration following their impressive earnings report.

Tariffs and Market Reactions

As the looming tariff deadline approaches on February 1, investors received news of a more moderate 10% tariff on Chinese imports, alleviating some concerns in the market. Yu highlighted two stocks that stand to benefit immediately from this shift in policy.

Performance Expectations in Tech

The expectations for big tech earnings are high, as showcased by the reaction to Microsoft Corp.'s earnings report; the stock plunged by 6% after the company cut its forward guidance. Analyst Thomas Hughes commented on the nuances of this situation, indicating that despite the cautious outlook, Microsoft’s strong historical performance could keep the stock on an upward trajectory.

AI and Future Growth

Thomas Hughes also analyzed Meta Platforms Inc.’s earnings, noting how the company is leveraging AI to monetize various facets of its business, positing that this could sustain its impressive growth rate.

Insights from Other Analysts

Sam Quirke identified Nike Inc. as a promising stock for potential recovery, emphasizing strong technical and fundamental signals combined with positive analyst sentiment.

Chris Markoch provided insights into NVIDIA, which has been experiencing volatility post-DeepSeek sell-off. He suggests that the stock might continue to see fluctuations leading up to its earnings announcement later this month.

Ryan Hasson spotted opportunities in the space sector, predicting that five stocks could perform exceptionally well in 2025, which is reminiscent of their market prowess in 2024.

In contrast, despite the pressures from the DeepSeek situation, Apple Inc. managed to maintain some stability, although investor reassurance will be crucial when the company shares its earnings announcement on January 30.

Market Reactions to Tariff Changes

Gabriel Osorio-Mazilli investigated the competitive edge of DeepSeek against NVIDIA, suggesting some stocks that could present enticing risk-reward options for interested investors. Additionally, he noted that Oracle Co. faced a significant sell-off in reaction to the DeepSeek news, although he believes this constitutes an overreaction given Oracle's market position.

Osorio-Mazilli also examined the implications of recent tariffs on the steel industry, pointing out potential winners and losers in this space.

Investment Opportunities

Leo Miller emphasized the importance of tracking where institutional investors are placing their bets, showcasing three stocks considered top picks by analysts for the year 2025.

Income-seeking investors were reminded by Miller that while dividend yield is essential, companies that consistently raise their dividends also deserve attention.

Finally, Nathan Reiff explored the anticipated surge in mergers and acquisitions (M&A) likely to unfold in 2025, detailing companies that are expected to announce acquisitions soon.

Reiff also mentioned three energy-focused ETFs that could prove attractive, given the optimistic forecasts for that sector.

This week, Eli Lilly & Co. drew significant attention as investors anticipate insights from the company’s forthcoming earnings report.

Stocks, Inflation, Technology, Energy, Earnings