- PCE inflation data, Q4 earnings season, Supreme Court tariff ruling, Davos World Economic Forum will be in focus in the holiday-shortened week ahead.
- GE Aerospace is primed for an earnings-fueled rally this week.
- United Airlines could hit turbulence on soft results and sector headwinds.
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U.S. stocks dipped on Friday, closing the week with modest losses for the Dow Jones Industrial Average, S&P 500, and the Nasdaq, as traders weighed the latest comments made by President Donald Trump related to the Federal Reserve and geopolitics.
Source: Investing.com
For the week, the 30-stock Dow fell 0.3%, the benchmark S&P 500 declined 0.4%, while the tech-heavy Nasdaq Composite shed 0.7%. The small-cap Russell 2000 jumped 2%, reaching another record closing high on Friday.
More volatility could be in store in the week ahead as investors assess the outlook for the economy, inflation, interest rates and corporate earnings amid ongoing trade and geopolitical tensions.
President Trump said on Saturday that eight NATO members will face escalating tariffs of up to 25%, unless a deal is struck for the U.S. buying Greenland.
U.S. markets will be closed Monday for observance of the Martin Luther King Jr. holiday. On the economic calendar, most important will be Thursday’s core PCE price index, which is the Fed’s favorite inflation gauge.
Source: Investing.com
Meanwhile, the fourth quarter earnings season shifts into high gear, with reports expected from several high-profile companies, including Netflix (NASDAQ:NFLX), Intel (NASDAQ:INTC), (NASDAQ:UAL), Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ), (NYSE:GE), and 3M Company (NYSE:MMM).
Investors are also waiting for the U.S. Supreme Court to issue a ruling on the legality of President Trump’s global tariffs after not doing so last week. The court will also hear arguments over Trump’s attempt to remove Fed Governor Lisa Cook.
And finally, news is also likely to roll out of Davos, Switzerland, where Trump is set to attend the World Economic Forum.
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, January 19 – Friday, Jan. 23.
Stock To Buy: GE Aerospace
GE Aerospace reports earnings this week with expectations pointing to another solid quarter. Analysts anticipate strong results, driven by surging aerospace demand and a fresh round of engine orders (Delta just tapped GE’s GEnx for its new 787 fleet).
The company’s Q4 update is scheduled to come out before the market opens on Thursday at 6:30AM ET. Market participants expect a sharp swing in GE stock following the print, with options markets pricing in a potential move of +/-5.2% in either direction post-earnings.
Source: InvestingPro
Analysts expect solid results, with consensus calling for adjusted EPS of $1.44 (up from $1.32 in the prior year) and revenue growth of around 13% year-over-year to $11.2 billion, fuelled by structural tailwinds like high demand for LEAP and GEnx engines (sold out through the decade) and increasing engine deliveries.
Investors will be closely watching GE’s guidance as much as the headline results. Recent updates, including new orders and expansions, reinforce optimism for 2026, with analysts projecting EPS growth to around $7.01 for the full year.
The company, a leader in jet engines and aerospace systems, continues to benefit from robust demand in commercial aviation, driven by recovering air travel and strong aftermarket services.
Source: Investing.com
GE is riding a powerful uptrend: Its price has soared 78.8% over the past year and sits just 2.3% below its 52-week high, with momentum confirmed by a “strong buy” signal across all technical timeframes.
If the company delivers the expected double‑digit revenue growth, stable or improving margins, and confident commentary around future demand, the stock has room to rally as investors continue to re‑rate GE Aerospace as a high‑quality, cash‑generative industrial leader.
Trade Setup:
- Entry: $326 (pre-earnings)
- Targets: $340 → $350 (gain ~5%-7%)
- Stop: $315 (risk ~3%)
InvestingPro highlights GE Aerospace’s promising outlook, emphasizing its favorable positioning in the Aerospace & Defense industry, which has allowed it to leverage a resilient business model and strong profit growth.
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Stock to Sell: United Airlines
In contrast, United Airlines is facing mounting headwinds as it approaches its Q4 earnings release on Tuesday at 4:00PM ET. While the airline has shown resilience in prior quarters, consensus points to challenges that could lead to a miss or muted reaction.
With implied volatility pointing to a +/-5.9% stock move in either direction for UAL post-earnings, the risk of a miss looms large.
Source: InvestingPro
Wall Street sees the Chicago-based airliner earning $2.96 a share, a decline of 9.2% from last year’s EPS of $3.26. Revenue is expected near $15.4 billion, but pressures from operational costs, capacity dynamics, and lingering issues such as disruptions and international performance weigh on the outlook.
The airline industry continues grappling with persistent operational challenges including flight delays, cancellations, and capacity constraints.
Furthermore, the emergence of new tariff pressures on European routes creates additional complexity for United’s international operations, as trade tensions and potential retaliatory measures could affect the carrier’s substantial transatlantic network.
Source: Investing.com
Recent technicals underscore the risk: UAL’s 1-hour indicators scream “strong sell,” with momentum and moving averages aligned to the downside.
In that context, UAL looks vulnerable this week: even if the headline numbers are close to expectations, a cautious outlook or incremental pressure on key international segments could be enough to send the stock lower.
Trade Setup:
- Entry: $113.50 (pre-earnings weakness)
- Targets: $105 → $95 (gain ~7.5%-16%)
- Stop: $120 (risk ~5%)
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Disclosure: This is not financial advice. Always conduct your own research.
At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF, and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF. I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.