Last Week’s Summary
- S&P 500 Index fell 0.45%
- International Equities fell 0.72%
- Emerging Markets fell 0.81%
- U.S. 10-Year Treasury Yield fell to 4.59%
- MNI Chicago PMI fell to 36.9
- Initial Jobless Claims fell to 211k
- ISM Manufacturing rose to 49.3
What to Watch for This Week
- M, 1/6/25 S&P Global US Composite PMI
- T, 1/7/25 JOLTS Job Openings, ISM Services Index
- W, 1/8/25 MBA Mortgage Applications, ADP Employment Change, Initial Jobless Claims
- Th, 1/9/25 MARKETS CLOSE – PRESIDENT CARTER’S FUNNERAL
- F, 1/10/25 Change in Nonfarm Payrolls, Unemployment Rate, U. of Mich. Sentiment
Weekly Market Recap
Investors were finally enticed to “buy the dip” in U.S. stocks. Following a five-day selloff that wiped out more than $1 trillion in market value, Wall Street ended its longest equities losing streak since April.
The Nasdaq 100 rebounded sharply on Friday, gaining 1.7%, while the S&P 500 rose 1.3%. These gains partially offset the week’s selloff, which had been fueled by a December downturn extending into the first trading day of the new year.
Traders appeared undeterred by warnings of slowing earnings growth for the so-called “Magnificent Seven” tech stocks and continued to pile into shares of AI leader Nvidia Corp. Stocks reached session highs in the afternoon, buoyed by the reelection of Mike Johnson as House Speaker, signaling Republican unity around a business-friendly deregulatory agenda.
Meanwhile, bond yields climbed, with the benchmark 10-year Treasury yield touching 4.6% after Richmond Fed President Tom Barkin reiterated his preference for maintaining restrictive monetary policy. Data from the ISM showed U.S. manufacturing activity rose modestly in December to 49.3-above estimates but still below the 50-threshold signaling economic expansion.
Investors searching for signs of resilience in the U.S. economy are weighing these developments against the Federal Reserve’s hawkish tone. Chair Jerome Powell’s December pivot hinted at slower and shallower interest rate cuts ahead.
This week, all eyes will be on the upcoming jobs report, which traders see as a critical indicator for the Fed’s next moves on interest rates later this month.
60-Second Breakdown:
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
The Best Invest Advise EVER! $2.7 billion Asset Manager:
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.
