Market Update

Last week, economic data was subdued as attention shifted to President Trump’s inauguration, executive orders, and Q4 earnings season, with the S&P 500 reaching new all-time highs.

Markets found encouragement last week as falling yields and softer-than-expected core inflation lifted sentiment. December’s CPI and PPI reports showed inflation easing in several key areas, supporting hopes for stable prices, though inflation remains above the Federal Reserve’s 2% target. Retail sales and housing data painted a mixed picture.

Stocks declined last week, driven by strong labor market data that raised concerns the Federal Reserve may cut rates less aggressively in 2025. Meanwhile, consumer debt outstanding declined year-over-year, as high interest rates on items like car loans persist.

The first week of 2025 began with equities posting modest losses amid sparse economic data, while bonds saw slight gains. Recession indicators remain mixed, with bearish signals from manufacturing and leading indicators, countered by bullish trends in the services sector and labor market.

Heading into the holidays, the week brought a mix of key economic updates and market turbulence. The Federal Reserve cut rates by 25 basis points but surprised investors with a less aggressive outlook for rate cuts in 2025.

Markets were mixed this week as November inflation data came in hotter, raising concerns about the slowing pace of disinflation.

October was a mixed month for markets, but our market cycle assessment remained bullish. Despite this reading, we maintain concerns that the market may be cooling from a bullish run.

Stocks had a strong week, with the S&P 500 and Nasdaq Composite reaching new all-time highs, driven by a November employment report that exceeded expectations.

The holiday week brought important data, including October’s PCE inflation at 2.3% annually and core inflation at 2.8%, which could influence the Fed’s December decision.

It was a relatively quiet week ahead of Thanksgiving, with U.S. stocks ending on a positive note despite mixed economic signals. The Conference Board’s Leading Economic Index continued its decline, pointing to potential recessionary risks, while existing-home sales saw their first annual increase since 2021, hinting at a possible market recovery. Labor market conditions remained steady, with initial claims showing slight improvement as investors await the next monthly jobs report.