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Weekly Investment Perspective

Keep up-to-date with our Weekly Investment Perspective.

The equity markets found firmer ground last week, while most domestic stock markets still came just short of positive territory. The S&P 500 ended the week, down -0.23, while the MSCI All Country World ex-USA was up 0.62. Bonds managed to end the week with gains. Investors continue to process how the myriads of changes being announced by the Trump administration will affect the stock markets as well as on a personal level.

The JOLTS (Job Openings Labor Turnover Survey) continued to show a low level of layoffs combined with low levels of hiring are netting out a stable yet continuing positive pace to the labor market. The quit rate for December remains below pre-pandemic norms. Job openings fell 6.8% in December, coming in lower than expected and bringing the ratio of job openings to unemployed workers down to 1.10. Initial claims for the first week of February remained low, but the increase in continuing claims for the week ended January 25 shows it is taking longer to find a job in the tight labor market. The unemployment rate declined to 4%, giving the Federal Reserve confidence that the labor market is strong enough to allow them to hold off on reducing interest rates.

Productivity showed modest gains and unit labor costs accelerated slightly in Q4. The administration policies on tariffs and immigration add uncertainty to the economic outlook. However, the longer-term view is optimistic considering the investment in AI research and development.

Tarif concerns continued contributing to the trade deficit widening in December. While Mexico and Canada may have avoided tariffs, for at least a month, the Trump administration is turning its attention on the European Union. China did not avoid U.S. tariffs and prices for computers along with other electronics could see price increases as a result.

Consumer sentiment among all ages, wealth, and political groups is showing strain with increased fears on the realization that tariffs will bringing higher inflation. The University of Michigan Consumer Sentiment Index declined in February more than forecast as consumers perceived it is too late to avoid tariff related price hikes. Consumers were pessimistic about current and future conditions.

This week production and retail sales numbers come out, both expected to decline feeling the effects of a possible global trade war and the possibility that buyers have already purchased merchandise, frontloading, ahead of higher prices.

IndexYTD Total Returns
S&P 500 Index2.55%
Dow Jones Industrial Average 4.22%
NASDAQ Index1.13%
S&P 400 Mid Cap Index2.82%
S&P 600 Small Cap Index1.76%
Russell 2000 Small Cap Index2.28%
MSCI All Country World ex-USA4.69%
Bloomberg Barclays US Aggregate (TR)0.92%

Returns are through | 2/11/2025


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