WEEKLY MARKET SUMMARY
Global Equities: The first full week of trading for 2026 was positive for stocks, with the S&P 500 turning in an impressive 1.6% weekly performance and ending at a new all-time high. Market breadth was strong as gains were distributed beyond technology-sector leaders among the broader market. The Dow Jones Industrial Average jumped 2.3% and the Nasdaq Composite advanced 1.9%. US small cap stocks showed relative strength, gaining 4.6% during the week. Foreign developed market stocks also started out the new year on a strong note, rising 1.8%, while emerging markets rose 1.6%.
Fixed Income: Rates were little changed during the week as investors interpreted jobs data as good enough to pause any imminent interest rate changes from the Fed. While there was little movement in the 10-Year yield, which closed out the week at 4.18%, mortgage rates eased in response to a social media post from President Trump stating his intention to have Fannie Mae and Freddie Mac begin purchasing mortgage-backed-securities. The average 30-Year fixed rate mortgage slipped below 6% for the first time in three years.
Commodities: US West Texas Intermediate Crude prices rose during the week to end above $59 a barrel, pressured by rising unrest in Iran. Gold prices regained the $4,500 level, while silver prices surged back above $80/oz during the week before pulling back slightly to end at $79.64.
WEEKLY ECONOMIC SUMMARY
Worst Jobs Year Since 2020: The US added 50,000 jobs in December, capping off 584,000 total jobs for 2025, a huge downgrade from the 2 million jobs gained in 2024. The Fed has suggested that the actual total could be lower due to issues with the BLS data model. Despite the poor data, the unemployment rate ticked down slightly to 4.4%, throwing cold water on any expectations of a Fed interest rate cut in the first quarter, and possibly postponing rate cuts until the second half of the year.
Maduro Repercussions: The US implemented regime change in Venezuela by invading the nation to arrest President Nicolás Maduro, dramatically changing the global oil market dynamics overnight. The US now effectively controls an estimated 300 billion barrels of Venezuelan reserves and indirect influence over a founding member’s seat at the OPEC table. US refiners were the immediate beneficiaries, since the Venezuelan crude requires extensive refining to be processed into a usable state. President Trump announced that the US began continuously selling Venezuelan crude on the open market, starting with 30-50 million barrels, and disbursing the proceeds to “benefit the people of Venezuela and the United States.”
Manufacturing Slump: The Institute for Supply Management Manufacturing Index slipped for the tenth consecutive month, hitting a 14-month low of 47.9. A sharp decline in imports and shrinking inventories contributed to the lackluster reading. Employment in factories also worsened, falling for an eleventh straight month in the longest hiring slump in roughly five years. President Trump has tried to spur domestic manufacturing by offering tariff exemptions for firms who move factories to the US, but many companies have elected to wait out the tariffs rather than undertake in the costly capital expenditures (and pay US workers the higher wages) required to re-shore production to the United States.
CHART OF THE WEEK
The Chart of the Week shows annual private sector jobs growth, which ends 2025 at just 61,000 jobs per month. The anemic jobs growth was the worst non-recession year for the private sector since the 2003 “jobless recovery” and could be at least partially attributable to artificial intelligence rendering some jobs obsolete. The Fed’s focus has shifted from fighting inflation to keeping the job market afloat, so any further job market weakness could spur rate cuts, although most forecasts call for the Fed to hold off at least until Q2 2026.
