Market Update

We understand that many of you are concerned about the potential impact of proposed tariffs and how they might affect your financial goals. In response, we’ve prepared a brief paper outlining the key considerations surrounding tariffs and their potential implications for investors.

Markets declined last week amid concerns over China’s technological advancements and renewed tariff tensions. The Federal Reserve held rates steady in its January meeting, citing inflation risks, while GDP growth for Q4 came in at 2.3%, slightly below expectations. Consumer confidence weakened in January, and personal spending outpaced income growth, leading to a decline in the personal savings rate.

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.