Economy
The number of Americans who filed for unemployment insurance last week declined from the previous week to 199,000. In addition, the number of Americans who are receiving unemployment insurance also declined. In the upcoming week we'll get the December jobs report showing how many net new jobs were created (or lost) for the previous month. The monthly jobs report has alternated between a positive number and a negative number for the last 7 months. Banks like Citi and Deutsche are looking for the number to be slightly below 100,000 net jobs created. We'll also be keeping an eye on the unemployment rate, which has been very slowly creeping higher over the past few years. A weakening jobs market gives the Fed a clear path to continue cutting interest rates, but the expectation on Wall Street is we won't see another rate cut when the Fed meets later this month.
Markets
The S&P 500 ended the year with 4 declining trading sessions in a row, but still finished up more than 16% to close out 2025. For the week the market fell 1.03%, but we began 2026 with a positive day. We have had a three-peat of annual double digit gains in the stock market. Can we see this continue in 2026? We've certainly got the right setup. Inflation is low, interest rates are falling, corporate profits are growing, and the AI theme is still in play. However, for whatever reason, midterm election years tend to see the steepest intra-year declines. As good as 2025 was for US stocks, it was even better in other asset classes. International stocks saw gains twice that of the S&P 500, and metals like gold and silver saw historic gains. It was a great reminder that there are more than just 7 companies leading portfolio gains higher.
What We're Reading
- Three Timeless Lessons From 2025 to Use in 2026- Ryan Detrick
- Decluttering as a Financial Strategy- WCI
Have a great weekend.
Dogwood Wealth Management