Last Week’s Summary
- S&P 500 Index rose 2.01%
- International Equities gained 1.71%
- Emerging Markets rose 1.27%
- U.S. 10-Year Treasury Yield fell to 4.63%
- CPI YoY rose to 2.9%, Core CPI YoY fell to 3.2%
- Initial Jobless Claims rose to 210k
- U.S. Retail Sales rose 0.4%
What to Watch for This Week
- M, 1/20/25 U.S. stock markets are closed for Martin Luther King Jr. Day
- W, 1/22/25 MBA Mortgage Applications
- Th, 1/23/25 Initial Jobless Claims
- F, 1/24/25 U. of Michigan Sentiment, Existing Home Sales, S&P Global U.S Manufacturing PMI
Weekly Market Recap
Stocks rallied to their best week since the November presidential election as Donald Trump prepared to take office as the 47th U.S. president. Trump, who will be sworn in on Monday, emphasized his focus on cutting taxes and raising tariffs.
Markets soared on hopes that his administration would implement pro-growth policies to benefit Corporate America. In addition, the U.S. Consumer Price Index (CPI) rose less than expected in December, fueling speculation that the Federal Reserve might cut rates sooner than anticipated.
Core CPI, excluding food and energy, climbed 0.2% for the month, marking its first slowdown in six months. This shift in inflation data came after Friday’s jobs report had pushed rate-cut expectations to late in the year.
A sharp rally in Treasuries sent 10-Year Yields down nearly 15 basis points, easing fears of rates hitting 5%. Corporate earnings remained a focus as traders assessed their implications for growth. Economic data released on Thursday painted a mixed picture of the U.S. economy. Homebuilders became less optimistic about future sales prospects amid ongoing challenges.
However, retail sales data showed that consumers remained resilient during the holiday season. Oil prices stayed elevated even after a ceasefire agreement between Israel and Hamas temporarily halted the Gaza conflict. The news provided some geopolitical relief but did little to disrupt broader market sentiment.
60-Second Breakdown:
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
HOW to Invest like a PRO!
Bryan Bourgeois, CEO/Founder of Shorebreak Capital, discusses why 90% of investors fail and how to avoid these common investment mistakes with Conner Small, Partner at Redwood Investment Management, Shorebreak Capital’s dedicated asset manager.