Click Here to view today’s Global Momentum Guide The Russell 2000 Index increased 3.96 percent last week, the Dow Jones Industrial Average 3.69 percent, the S&P 500 Index 2.91 […]
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Market Perspective for January 20, 2025
The first full trading week in January was quite volatile as the market anticipates a number of policy changes that will likely have an impact on stocks, bonds and currencies when Donald Trump takes office.
The first major news release came out on Tuesday when the Price Producers Index for December was made public. It was reported that Core PPI was flat while overall PPI was up .2 percent. Analysts had expected Core PPI to increase by .2 percent while overall PPI was expected to increase by .4 percent.
On Wednesday, inflation data was released and provided some calm to jittery markets. It was revealed that Core CPI increased by .2 percent for December while overall CPI was up .3 percent. It was believed that Core CPI increased by .3 percent prior to the release while overall CPI was in line with analyst expectations. On an annualized basis, inflation rose from 2.7 percent to 2.9 percent.
Thursday saw the release of retail sales data in addition to unemployment claims data for the previous seven days. Core retail sales as well as overall retail sales were up by .4 percent over the last month, which was lower than the projected .5 percent and .6 percent increases, For the past week, there were 217,000 claims for unemployment benefits, which was higher than the projected 210,000 claims prior to the report’s release.
On Friday, Treasury Secretary Janet Yellen announced that extraordinary measures would begin on Tuesday. Those measures are designed to ensure that the government doesn’t default on its financial obligations after the nation hits its debt limit. A default could happen at some point in the summer if the debt ceiling isn’t increased or abandoned altogether.
The S&P 500 finished the week up 3.61 percent to close at 5,996. It made its low of the week on Monday morning when it dipped to 5,981 just before noon that day. The market then reversed and would finish at its weekly high. Despite the strong gains over the past five trading days, the index is still down about 1 percent for the month.
Like the S&P, the Dow also finished the week up more than 3 percent closing at 43,487 at the end of trading on Friday. The two indexes were also similar in that they made their lows of the week on Monday. On Monday, the Dow dipped to 41,957 before reversing and closing just off its high of the week of 43,632.
Finally, the Nasdaq finished at 19,630, which was a gain of 3.87 percent for the week. It made its low of the week on Monday morning when it dipped to 18,882 and would make its high of the week of 19,687 on Friday afternoon. As with the other indexes, the Nasdaq is down for the year having lost nearly 2 percent in January.
In international news, Great Britain announced on Tuesday morning that inflation was 2.5 percent on an annualized basis, which was slightly lower than the 2.6 percent reported in December. On Wednesday, the nation announced that retail sales were up .1 percent for the month. Australia announced on Wednesday evening that the nation’s unemployment rate inched up to 4 percent despite its economy adding over 50,000 jobs in the final month of 2024. It was announced early Friday morning that Japan will likely increase the nation’s key interest rate next week.
The upcoming week is going to feature a significant number of events, besides the inauguration of President-Elect Trump on Monday. On Friday, Flash Services and Flash Manufacturing PMI reports will be made public, and several European countries will release their own such reports on Thursday evening and early Friday morning.
The Investor Guide to Vanguard Funds for January 2025
The Investor Guide to Vanguard Funds for January is AVAILABLE NOW! Links to the January data files are posted below. Market Perspective: Will Technology Continue to Lead in 2025? Equities […]
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Global Momentum Guide for January 13, 2025
Click Here to view today’s Global Momentum Guide The MSCI EAFE declined 0.44 percent last week, the Dow Jones Industrial Average 1.86 percent, the S&P 500 Index 1.94 percent, […]
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Market Perspective for January 12, 2025
The first full trading week of January was a consequential one, largely because nonfarm payroll reports were released. On Wednesday, the ADP nonfarm payroll report revealed that 122,000 jobs were added in December, which was lower than the expected 139,000 and was also lower than November’s 149,000 figure.
On Friday, the Bureau of Labor Statistics (BLS) released its report that found the economy added 256,000 jobs in December. This was higher than the expected 164,000 additional positions and was also higher than the 212,000 added last month. It’s worth noting that November’s figure was revised downward, so it’s possible that changes could be forthcoming to December’s tally as well.
The unemployment rate ticked down to 4.1 percent from 4.2 percent. Average hourly earnings were steady at .3 percent for the month of December, which was what analysts had expected prior to the release of that information.
The FOMC meeting notes from the December gathering were made public. One of the key takeaways was that Donald Trump’s plan to use tariffs as a trade tool could make it harder to restrain upward price pressures. Ultimately, it could result in slower rate cuts in the coming year.
Furthermore, the Fed announced that rate cuts could be on hold without any tariffs because inflation has remained sticky. With demand for services still strong, it’s unlikely that inflation will return to the stated goal of 2 percent anytime soon. On Tuesday, the ISM Services PMI came in at 54.1 compared to an expected 53.5. Also on Tuesday, the JOLTS labor survey indicated that there were 8.1 million positions available, which was higher than the 7.73 believed to be available.
Unemployment claims data was released on Wednesday morning. It was revealed that 201,000 claims for benefits were made during the past seven days, which was below the expected 214,000.
The S&P 500 finished 2.66 percent lower this week to close at 5,827. On Monday, the index made a high of 6,019 before reversing and tumbling through Friday morning. Early that day, the market hit its low of 5,817.
As with the S&P, the Dow would also fall by more than 2 percent closing at 41,938. During the shortened trading week, the market ranged from a high of 43,109 set on Monday to a low of 41,889 set on Friday.
Finally, the Nasdaq also fell this week by more than 3.6 percent to close at 19,161. The market would hit its high of the week on Monday afternoon when it reached 19,994. Meanwhile, its low of the week was 19,044 set on Friday morning prior to gaining ground that afternoon.
In international news, Canada also announced jobs data on Friday signaling that the country’s economy may be on the mend. It was revealed that the economy added nearly 91,000 jobs and saw its unemployment rate drop to 6.7 percent compared to an expected 6.8 percent. Australia announced on Tuesday that inflation in the nation was 2.3 percent compared to an expected 2.2 percent on an annualized basis.
The upcoming week will feature the release of price change data on Tuesday followed by CPI figures on Wednesday. Inflation is expected to have increased to 2.9 percent on an annualized basis from 2.7 percent last month. Retail sales data will be released on Thursday in addition to unemployment claims for the past week.