Categories:
Key areas of focus
- All eyes turn to Friday’s jobs report, which should clarify whether labor market weakness persisted into January. December payrolls rose just 50,000, well below expectations, closing out a year where average monthly job gains slowed to 49,000 which was less than one-third of 2024’s pace.
- Additional data this week includes manufacturing and services surveys, sentiment indicators, construction spending, JOLTS and ADP employment updates, consumer credit, and continued earnings releases as reporting season nears its midpoint with roughly one-third of firms already having reported results as of Friday. Analysts now expect S&P 500 earnings to have grown 11.9% in the fourth quarter, up from an 8.2% estimate just a week earlier, according to FactSet.
- Precious metals saw extreme volatility on Friday. Gold and silver surged to record highs Thursday before reversing sharply Friday following the nomination of a new Fed chair. Gold futures slid below $4,900 after topping $5,586, while silver fell to roughly $82 after peaking near $121.
Week in review
This week delivered plenty of macro and micro data, ranging from inflation and sentiment surveys to the January FOMC meeting and corporate earnings updates. Monday kicked off on a positive note as Durable Goods orders surged 5.3% in November, driven largely by aircraft demand, with prior data revised modestly higher. Tuesday kept the positive tone going as home prices surprised to the upside. However, consumer confidence slid to 84.5, its weakest level since the post-GFC period. The S&P briefly touched a new all-time high on Wednesday before fading ahead of earnings and the January FOMC meeting. The Fed held steady, citing solid growth and signs of labor market stabilization, while noting that policy could ease should conditions soften. On Thursday, equities moved lower following mixed Tech earnings and a wider trade deficit, even as factory orders surged. Volatility returned on Friday after President Trump announced Kevin Warsh as his Fed Chair nominee. That same day, PPI surprised to the upside, while precious metals suffered sharp declines to close out the month.
Spotlight
In what feels like the blink of an eye, January has come and gone. Headlines were anything but scarce. From geopolitical stress in Venezuela and Greenland to a criminal investigation surrounding Jerome Powell, markets had plenty to digest. On Friday, the focus returned to monetary policy as President Trump announced Kevin Warsh as his nominee for the next Federal Reserve Chair, with Powell’s term set to expire in May. Warsh brings prior Fed experience, having served as a governor from 2006 to 2011, and remains the youngest person ever appointed. Since then, he has worked across the private sector and academia, advocating for lower rates, a smaller Fed balance sheet, and lighter regulatory burdens, particularly for smaller banks. Markets sold off on the news, with broad equity declines while the 10-year yield held steady. Futures markets priced in slightly higher odds of rate cuts, with June probabilities rising from 61.7% to 67.5%. Notably, the probability of two rate hikes by September increased from 48.5% to 55.2%, per the CME FedWatch tool.
Markets
Sectors
Style & Market Cap
Sources
United States Census Bureau, Monthly Advance Report on Durable Goods Manufacturers' Shipments Inventories and Orders, retrieved from U.S. Census, https://www.census.gov/manufacturing/m3/adv/current/index.html
2. Home Prices
S&P Global, S&P Cotality Case-Shiller Index Reports Annual Gain In November 2025, retrieved from S&P Global; https://www.spglobal.com/spdji/en/index-announcements/article/sp-cotality-case-shiller-index-reports-annual-gain-in-november-2025/
3. Consumer Confidence
The Conference Board, US Consumer Confidence, retrieved from The Conference Board; https://www.conference-board.org/topics/consumer-confidence/
4. Trade Deficit
Bureau of Economic Analysis, International Trade in Goods and Services, retrieved from BEA, https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services
5. Factory Orders
United States Census Bureau, Monthly Full Report on Manufacturers’ Shipments, Inventories, & Orders, retrieved from U.S. Census, https://www.census.gov/manufacturing/m3/current/index.html
6. Producer Price Index (PPI)
U.S. Bureau of Labor Statistics, Producer Price Index News Release Summary, retrieved from U.S. Bureau of Labor Statistics; https://www.bls.gov/news.release/ppi.nr0.htm
7. CME FedWatch Tool
CME Group, FedWatch, retrieved from CME Group; https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
8. FOMC Statement
The Federal Reserve Board, Federal Reserve issues FOMC statement, retrieved from Board of Governors of the Federal Reserve System; https://www.federalreserve.gov/newsevents/pressreleases/monetary20260128a.htm
Market Data
Morningstar Direct using Morningstar Indices
Authors:
Anthony Silva, CFA®
Senior Director of Strategy Management
World Investment Advisors, LLC