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Earnings will drive the stock market in the week ahead. That’s a good thing

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The good times are still rolling on Wall Street. An intensifying earnings season will put that momentum to the test. The S & P 500 ended Friday at a record high, buoyed by strong quarterly results from Club holding Wells Fargo and other major financial firms, which reinforced the idea of a healthy U.S. economy. The index posted its fifth positive week in a row, advancing 1.1%. Meanwhile, the Dow Jones Industrial Average rose 1.2% in the week and also closed Friday at an all-time high. The tech-heavy Nasdaq Composite gained 1.1% and now sits just 1.6% below its July peak. The third-quarter earnings calendar starts to get crowded in the coming days, featuring more major U.S. banks, health-care heavyweights and a few industrial and tech players. All eyes will be on the numbers and what executives have to say on their outlooks — just as it should be, according to Jim Cramer. When consumer price index for September came in a bit hotter than expected Thursday morning , Jim cautioned investors against sweating every line in every economic report. Keep your “eye on the prize,” he said. Right now, he said, that prize is “companies which are about to have earnings.” The high-level takeaway from the economic data in recent days is what matters most: Inflation is broadly trending down. The CPI in September showed an annual inflation rate of 2.4%, slightly above consensus but below the 2.5% figure seen in August. In Friday’s look at wholesale inflation, the producer price index was unchanged month over month . Economists had expected a 0.1% monthly gain. As the market marched back to records, we mostly sat tight. Exiting Procter & Gamble on Tuesday was our lone trade of the week. Simply put: a defensive stock like the maker of Crest toothpaste and Dawn soap didn’t seem right for the portfolio as the Federal Reserve embarks on an easing cycle and the economy remains on solid ground. Wells Fargo and JPMorgan reinforced that notion Friday with their earnings reports. Shares of both banks surged — Wells up 5.6%, JPMorgan up 4.4% — and helped the financial sector climb the S & P 500 leaderboard for the week. Tech led the way, up 2.5%, followed by industrials and financials, which added 2.1% and 1.8%, respectively. Utilities and communication services were the main laggards, losing 2.6% and 1.4%, respectively. In the week ahead, a number of influential companies are set to report including UnitedHealth and Goldman Sachs on Tuesday. ASML on Wednesday and Taiwan Semiconductor Manufacturing Co . on Thursday will provide a glimpse at the state of the AI trade before the megacap tech companies report later in the month and beyond. We’ll hear from Club holdings Morgan Stanley and Abbott Laboratories on Wednesday morning. Morgan Stanley: The ongoing recovery in investment banking will be front and center. That was a key theme in the second quarter , and the hope is that the July-to-September period showed a continuation of the trend for Morgan Stanley. An encouraging sign arrived Friday, with JPMorgan reporting a better-than-expected number for its investment banking segment. Shares of Morgan Stanley had suffered through a period of underperformance, leading Jim to openly question whether owning rival Goldman Sachs was a better idea. Morgan Stanley has been strong lately, though. The stock is up more than 14% over the past month and closed Friday at a record $110.91 a share. Morgan Stanley’s results Wednesday should hopefully add more clarity on our next move. Indications that its growing wealth management segment has found its footing would be welcome news. Abbott Labs: The medical products maker’s legal fight over its premature infant formula looks more manageable after a trio of U.S. health agencies recently pushed back against claims that formulas like Abbott’s cause an intestinal illness commonly abbreviated as NEC. To be sure, a second trial on the matter is ongoing in St. Louis, so Abbott Labs is not out of the woods just yet. Nevertheless, agencies including the Food and Drug Administration lending their support to the formulas is a big deal. “You clean up the lawsuits, [the stock] goes to $125,” Jim predicted Friday. The reason it would be so positive? Abbott’s strong fundamentals have been obscured by the legal issues. On that front, we’ll be looking for updates on the U.S. launch of Abbott’s over-the-counter continuous glucose monitoring systems and the state of its medical devices business overall. Weak points in the second quarter were nutrition and established pharmaceuticals, but even with them, Abbott has reported back-to-back beat-and-raise quarters. A third would be nice. Week ahead Monday, Oct.14 Before the bell: Charles Schwab (SCHW) Tuesday, Oct. 15 Before the bell: Walgreens Boots Alliance (WBA), UnitedHealth (UNH), Citigroup (C), Bank of America (BAC), Johnson & Johnson (JNJ) and Goldman Sachs (GS) After the bell: United Airlines (UAL), Interactive Brokers (IBKR) and JB Hunt (JBHT) Wednesday, Oct.16 Before the bell: Morgan Stanley (MS), Abbott Labs (ABT), ASML (ASML), US Bancorp (USB), Citizens (CFG) and Prologis (PLD) After the bell: Alcoa (AA), PPG Industries (PPG), CSX (CSX), Kinder Morgan (KMI), Discover (DFS) and Crown Castle (CCI) Thursday, Oct. 17 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. ET: Retail Sales 8:30 a.m. ET: Industrial Production & Capacity Utilization Before the bell: Taiwan Semi (TSM), Travelers (TRV), Elevance (ELV), Huntington Bancshares (HBAN), Blackstone (BX), Truist (TFC) and KeyCorp (KEY) After the bell: Netflix (NFLX), Intuitive Surgical (ISRG) and Crown Holdings (CCK) Friday, Oct. 18 8:30 a.m. ET: Housing Starts & Building Permits Before the bell: American Express (AXP), SLB (SLB) and Procter & Gamble (PG) (Jim Cramer’s Charitable Trust is long WFC, MS and ABT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A view of the New York Stock Exchange building in the Financial District in New York City on Aug. 5, 2024.

Charly Triballeau | Afp | Getty Images

The good times are still rolling on Wall Street. An intensifying earnings season will put that momentum to the test.

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Earnings will drive the stock market in the week ahead. That’s a good thing