Weekly Market Update

Weekly Market Update: January 12th-18th

The past week was marked by a mix of positive and negative developments in the markets. Here are some key takeaways:
• Stocks closed mixed: The S&P 500 settled almost 0.2% higher on Monday, while the Nasdaq Composite fell 0.4%. However, the Dow Jones Industrial Average rose 0.8%.
• Inflation data showed progress: The Consumer Price Index (CPI) showed prices climbed 0.2% month-on-month on a core basis, easing from November's 0.3% gain.
• Tech stocks staged a comeback: Nvidia and Tesla shares nudged back into the green, while Apple stock up 0.7% in afternoon trading after booking its worst loss since August.
• Rate optimism remains: The likelihood of interest-rate cuts before July has increased, with traders now seeing just a 3% chance that the Fed lowers rates in January.

Market Outlook:

The market outlook remains uncertain, with some analysts expecting a smooth year ahead while others are more cautious due to concerns about inflation and interest rates.
• Investment Quality Trends: Portfolio manager Kelley Wright expects the S&P 500 to return at least 8% this year.
• The Prudent Speculator: Portfolio manager John Buckingham expects 2% U.S. GDP growth this year to support an 8% gain for the S&P 500.

Key Indicators:

1. The 10-year Treasury yield (^TNX) has risen about 40 basis points since Trump was elected, reaching its highest level since late April 2024.
2. Housing starts climbed faster than forecast in December, while US industrial production outstripped estimates.

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