Market Update – January 26th, 2026

Sound Planning Group Team

Financial Markets

Markets opened the shortened week with a selloff on Tuesday amid heightened geopolitical tensions. Economic data released in the latter half of the week pointed to stable inflation and continued growth in household spending, helping equities recover slightly. The week ended lower overall, with the Dow Jones Industrial Average down 0.53%, the S&P 500 down 0.35%, and the Nasdaq Composite down 0.06% as of Friday, January 23rd.

Market News

PCE Inflation. October and November PCE inflation data were released last week following lingering delays from the federal shutdown. Headline and core PCE inflation came in at 2.7% annually in October, both rising to 2.8% in November. On a month-over-month basis, both measures increased 0.2% in each month.

The data reflects a continuation of moderate inflation trends, with price pressures remaining relatively stable but still above the Federal Reserve’s 2% target, reinforcing the view that progress toward disinflation may remain gradual.

Source: US Bureau of Economic Analysis

Personal Income, Spending, & Saving

Released alongside the delayed PCE inflation report, data on personal income, spending, and saving pointed to continued strength in consumer spending, though with a growing imbalance between income and outlays. In October, personal income increased 0.1% month over month while spending rose 0.4%. That gap continued in November, with income up 0.3% and spending accelerating to 0.5%. As a result, the personal saving rate declined to 3.7% in October and fell further to 3.5% in November.

Over the past seven months, spending has consistently outpaced wage growth, leading to a slow but steady decline in household saving rates. This dynamic may reflect improved consumer confidence and a reduced inclination toward precautionary saving. At the same time, elevated price levels and moderating wage growth may also suggest households are devoting a larger share of income to necessary spending, limiting their ability to save. While the reality likely lies between these scenarios, the persistence of this trend remains an important dynamic to be aware of.

Source: US Bureau of Economic Analysis

Leading Indicators

The Conference Board’s Leading Economic Index (LEI) declined in both October and November, with the index delayed due to the government shutdown. The index has remained persistently negative over the past year, though the sources of weakness continue to evolve.

In November, the largest drags came from softer consumer expectations and weaker new orders. These declines were partially offset by improvements in average weekly manufacturing hours and initial jobless claims, but not enough to prevent a decrease in the index.

The rate of change in the LEI has stabilized and no longer signals a recession or economic slowdown, and while leading indicators remain subdued, the easing in negative momentum has shifted the signal to a more neutral stance.

Source: The Conference Board

Recession Indicators

With the latest update to the Leading Economic Index shifting to a more neutral signal, the broader balance of recession indicators has become less bearish in recent months. Currently, our dashboard shows three indicators signaling a bullish outlook, two remaining bearish, and three in neutral territory.

On the more positive side, ISM Services has remained persistently expansionary, the high-frequency ADS Business Conditions Index is currently positive, and the Philadelphia Fed Business Outlook Survey has shown improvement. In contrast, manufacturing activity continues to face pressure, and employment conditions have softened, as reflected in the Employment Trends Index. Sitting in neutral territory are the Leading Economic Index, the Chicago Fed National Activity Index, and the Anxious Index.

As a whole, near-term recession risks appear to have moderated, with the overall signal shifting from more bearish toward neutral in recent months, as delayed government data releases have generally surprised to the upside.

Gold & Silver

Precious metals posted a strong week as geopolitical tensions between the U.S. and Europe came into focus during the World Economic Forum in Davos. Elevated geopolitical risks and a U.S. dollar that has depreciated against several major currencies, including the euro, have continued to support demand for alternative and safe-haven assets into the new year. Against this backdrop, precious metals received a significant boost last week, with silver (SLV) rising 14.65% and gold (GLD) gaining 8.69%.

Summary

Last week’s economic releases showed stable PCE inflation, continued growth in household spending, and a gradual decline in saving rates, while the Leading Economic Index and broader recession indicators shifted toward a more neutral stance. These trends point to moderate economic momentum heading into 2026, even as geopolitical tensions continued to drive demand for safe-haven assets like gold and silver.

In closing, we want to express our sincere gratitude to our valued readers and loyal customers for entrusting us with your financial well-being. Your continued support is the cornerstone of our success, and we are committed to serving you with the utmost dedication and professionalism. As we navigate the ever-changing financial landscape together, we encourage you to reach out to us if there have been any shifts in your risk tolerance or if you have experienced any material changes in your Investment Policy Statement objectives or constraints. Your financial goals are our top priority, and we are here to adapt and tailor our strategies to align with your evolving needs, whether they pertain to risk and return objectives or constraints such as time horizon, taxes, liquidity needs, legal issues, unique circumstances, or changes in your financial planning and retirement objectives. Your feedback and communication are essential in helping us ensure your financial success. Thank you once again for your trust and partnership with Synergy Asset Management. We look forward to continuing this journey together.

We appreciate your continued trust.

Joseph M. Maas, CFA, CFP®️, ChFC, CLU®️, MSFS, CVA, ABAR, CM&AA, CCIM

Chief Investment Officer, SPGA

Disclosure:

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