Stocks experienced a volatile week as stock traders rotated out of technology and AI shares before a late-week rebound pared losses. A midweek selloff, driven by concerns over slowing labor demand and rising jobless claims, gave way to a strong rally on Friday that pushed the Dow above the 50,000 mark for the first time. Market leadership shifted decisively toward defensive and cyclical areas, with consumer staples, industrials, and energy outperforming, while technology, communication services, and consumer discretionary lagged. Treasury yields edged lower as bond prices rose modestly, while crude oil prices pulled back after several weeks of gains.
Last Week’s Economic News
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Job openings declined, falling to 6.5 million in December, signaling softer labor demand.
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Hiring improved, but total separations also increased, reflecting growing churn in the labor market.
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Manufacturing activity strengthened, with the PMI rising to 52.4 in January, supported by inventory rebuilding, though politics continued to temporarily pressure input costs and exports.
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Services sector growth remained positive, with foreign demand weakening amid political uncertainty.
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Weekly jobless claims increased, suggesting near-term labor market cooling.
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Gasoline prices still lower, and remain well below year-ago levels.
Eye on the Week Ahead
Stock trading speculation over the short term will be focused on upcoming inflation data, including the Consumer Price Index and retail sales report, for further insight into price pressures and consumer resilience as markets assess the Federal Reserve’s next policy move.
Have a nice week!
Sincerely,
Robert G. Carpenter