Friday Market Update: Wildfires, Fed Decisions, and Earnings Reports

The U.S. financial markets saw a quiet day on Thursday, as many closed for a national day of mourning following the death of former President Jimmy Carter.

Treasury yields dropped during the shortened trading session. On Friday, stock futures pointed lower as investors prepared for the December jobs report. S&P 500 futures and Nasdaq-100 futures both dropped by about 0.1%. Dow Jones futures lost 16 points, or 0.04%.

Wildfires Continue to Rage in Los Angeles Area

In California, wildfires continued to burn out of control, especially in the Los Angeles area, where nearly 180,000 people were forced to evacuate.

The damage is expected to be immense, with JPMorgan estimating that insured losses could exceed $20 billion. The Palisades Fire, the largest of several burning in the area, has caused significant destruction in the upscale Pacific Palisades neighborhood. Homes in this area have a median price of over $3 million.

JPMorgan raised its estimate of total economic losses from the fires to nearly $50 billion, more than double the previous day's estimate. Investors should watch for any broader economic implications, particularly for the insurance and real estate sectors.

Delta Air Lines Reports Strong Earnings

On the earnings front, Delta Air Lines (NYSE:DAL) reported strong results for the fourth quarter. The airline beat both sales and earnings estimates, and its first-quarter outlook exceeded analyst expectations.

Delta’s CEO, Ed Bastian, highlighted the ongoing consumer preference for experiences over goods, which he said positions Delta for a record year. The airline expects to generate more than $4 billion in free cash flow in 2025, an 18% increase from the previous year.

Federal Reserve Signals End to Rate Cuts

Meanwhile, comments from Federal Reserve Governor Michelle Bowman indicated that the central bank is likely done with interest rate cuts for now.

She called the December rate reduction "the final step in the policy recalibration phase." Bowman also stated that the current rate is near neutral, but inflation risks remain. These remarks came after the release of the December Fed meeting minutes, which showed concerns about the potential impact of President-elect Donald Trump’s proposed policies.

For investors, this suggests that the Fed’s rate-hiking cycle may be over, but inflation concerns could persist.

Walgreens Boots Alliance Surges After Beating Expectations

Walgreens Boots Alliance (NASDAQ:WBA) also delivered solid earnings in its fiscal first quarter.

The stock surged 11% following better-than-expected results. The company posted earnings of 51 cents per share on $39.46 billion in revenue, surpassing analysts' expectations of 37 cents per share and $37.36 billion in revenue.

Walgreens maintained its adjusted earnings guidance for fiscal 2025 between $1.40 and $1.80 per share. With these positive earnings and an optimistic outlook, Walgreens appears well-positioned for strong performance in 2025, making it an attractive option for investors looking for stability in the healthcare sector.