MARKET COMMENTARY
Happy New Year! Markets overall started off strong last Friday during the first trading day of the year, while the Mag 7 experienced a weaker welcome. Over the weekend, President Trump took further action towards solving alleged drug-trafficking in Venezuela by capturing their President, Nicolas Maduro. This follows months of attacks on assumed drug-smuggling boats. With Venezuela holding the world’s largest reserves of crude oil, this turmoil could alter future production of the resource. While this might create a disruption in short-term supply, there’s potential for a boost in long-term supply which could lead to lower oil prices and more production.
The week ahead will include a few important data releases with the center of attention being on an updated picture of December’s job market. After months of delayed and distorted data, we’re finally back on track with proper reporting. However, upcoming releases may not be promised with the Affordable Care credits officially over and the Senate still not at a consensus on how to move forward, risking yet another shutdown. For now, we’ll appreciate the data we have which is expected to continue reflecting a slower but improving job market with a slight decline to the unemployment rate making it 4.5% and a rise of 50k+ to nonfarm payrolls. If the case, this will likely support further Fed rate cuts in 2026.
A major concern lingering over investor heads in the past few years has been the heavy concentration in stock returns. We hope to see dynamic turn and provide a broader tailwind if breadth in the market finally begins to widen this year. As of now, things are looking optimistic for this change, with more stocks above their moving averages and reaching new highs outpacing new lows. Momentum remains mixed across indexes with U.S. large cap improving while small cap lags.
Economic Releases This Week
Monday: ISM Manufacturing Index
Tuesday: S&P U.S. Services PMI
Wednesday: ISM Services Index, ADP Employment, Job Openings
Thursday: Initial Jobless Claims
Friday: US Unemployment Data, Consumer Sentiment
Stories to Start the Week
Trump removes leader Nicolás Maduro from Venezuela and attempts to take control over their government
Trump’s repeats threats to annex Greenland, currently a Danish territory
What to expect at CES, the tech industry’s biggest show of the year
First GLP-1 pill for obesity from Novo Nordisk launches in the U.S.
Stranger Things finale hit well over $25 million to the box office after releasing on New Year’s in over 620 locations