February 9, 2025
Volume 12, Issue 06
Weekly Recap
The major domestic equity indexes traded lower last week. The S&P 500 held up best, falling just 0.24 percent. Stocks opened sharply lower to start the week in response to the prior Friday’s announcement from President Trump stating that the U.S. would be implementing 25 percent tariffs on imports from Mexico and Canada, along with 10 percent levies on Chinese imports, as of February 1. However, by the end of the day Monday, Mr. Trump had agreed to postpone tariffs on Mexico and Canada for 30 days, which provided some relief and seemed to help stocks recover some of their early losses by the end of the week. Meanwhile, earnings-related headlines seemed to be the other notable driver of sentiment as investors digested another busy week of releases. According to data from FactSet, 77 percent of S&P 500 companies that have reported fourth-quarter results through Friday have posted consensus-topping earnings, with an average growth rate of 16.4 percent (compared with estimates for 11.9 percent earnings growth). Of the companies that have reported thus far, 63 percent have also surpassed sales expectations.
Last week’s economic data releases kicked off on Monday with the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index, which indicated that factory activity in the U.S. expanded in January for the first time since 2022. However, on a call with reporters following the data release, ISM Manufacturing Business Survey Chair Timothy Fiore noted that potential tariffs represent a “huge threat” to a sustained recovery in the U.S. manufacturing sector.
Later in the week, the ISM reported that its Services PMI for January declined from December, although the reading remained in expansion territory at 52.8 (readings above 50 indicate expansion).
The highlight of last week’s economic calendar came from Friday’s closely watched nonfarm payrolls report. The Labor Department reported that the U.S. economy added 143,000 jobs in January, down from an upwardly revised reading of 307,000 in December and below economists’ expectations for 170,000. The unemployment rate also declined unexpectedly, to 4.0 from 4.1 percent in the prior month.
In other labor market-related news, the Bureau of Labor Statistics reported on Tuesday that U.S. job openings fell to a three-month low of 7.6 million in December, which seemed to provide support for the narrative that the U.S. labor market is stable but gradually cooling. Likewise, Thursday’s initial jobless claims data indicated that new claims for unemployment increased by 11,000 to 219,000 in the week ended February 1, while continuing claims rose to 1.89 million from 1.85 million in the prior week. Both readings were slightly above consensus expectations. Last week’s softer-than-expected employment data seemed to help drive positive returns for U.S. Treasuries as yields across most maturities decreased from where they ended the prior week (the short end of the yield curve saw yields drift higher). The bond market seems to be starting to price in the impact that tariffs could have on global growth and disinflationary pressures.
Market Monitor
A full listing of market performance data is available here.
DQYDJ.com (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual stocks. Koyfin.com provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.
In the News
The U.S. economy added 143,000 jobs in January and the unemployment rate edged down to 4 percent, showing cooling but still solid gains for the labor market, the Labor Department announced Friday. The gain in jobs marked a drop from November and December and was less than the 169,000 jobs economists had expected for January, according to a survey by The Wall Street Journal. But the job counts for November and December were revised upward by a combined 100,000. The unemployment rate was below the 4.1 percent that had been expected.
The Bureau of Economic Analysis announced Wednesday the U.S. trade deficit – the gap between the value of U.S. imports and exports – expanded to $98.4 billion in December, up from $78.2 billion in November. Imports were up 3.5 percent month-over-month to an all-time high of $364.9 billion amid the threat of tariffs, while exports fell 2.6 percent month-over-month to $266.5 billion.
In the week ending February 1, the advance figure for seasonally adjusted initial jobless claims was 219,000, an increase of 11,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 207,000 to 208,000. The 4-week moving average was 216,750, an increase of 4,000 from the previous week’s revised average. The previous week’s average was revised up by 250 from 212,500 to 212,750.
The ISM® Services index was at 52.8 percent, down from 54.0 percent last month. The employment index increased to 52.3 percent, from 51.3 percent. Note: Above 50 indicates expansion, below 50 in contraction. The ISM manufacturing index indicated expansion. The PMI® was at 50.9 percent in January, up from 49.2percent in December. The employment index was at 50.3 percent, up from 45.4 percent the previous month, and the new orders index was at 55.1 percent, up from 52.1 percent.
The number of job openings decreased to 7.6 million on the last business day of December, the U.S. Bureau of Labor Statistics reported Tuesday. Over the month, hires and total separations were little changed at 5.5 million and 5.3 million, respectively. Within separations, quits (3.2 million) and layoffs and discharges (1.8 million) changed little.
Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year U.S. Treasury yields, rather than the Fed’s benchmark short-term rate. He repeated his view that expanding energy supply will help slow inflation.
A Fed official pushes back on preemptive policy moves.
Is the bond market flashing a warning?
Online scamming is a vast, sophisticated, and fast-growing global enterprise that compares in size and scope to the illegal drug industry. Except that in many ways it is worse. Expect to pay more for your latte; coffee prices have doubled in less than 12 months.
Charts of the Week
I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.
- Five Top Regrets of Retirees (Fritz Gilbert)
- 20 IRA Mistakes to Avoid (Christine Benz)
- SSA Answers Social Security Fairness Act Questions (Melanie Waddell)
- Mind Over Money (Jonathan Clements)
This is the best thing I’ve read recently. The coolest, unless it was this. The saddest. The funniest. The best story. Listening Party. Somebody bought a $15 million Van Gogh at a Minnesota garage sale for fifty bucks. Madonna is working as a standup comedian. The luxury Disney Star Wars hotel – where families paid $20,000 for a stay just a few months ago – is now office space. Old ladies in Japan are trying to get sent to prison. And Olive Garden might be replacing its famous breadsticks with hot dog buns. Waffle House added an egg surcharge amid rising egg prices. My 14th annual Investment Outlook, for 2025, is now available.
Back in the late 1980s, then-Los Angeles Lakers coach Pat Riley trademarked “Three-Peat” in various forms. Fast-forward more than 35 years, and the Kansas City Chiefs just did a deal with Riley to allow “Three-Peat” merch if they win. Fox sold out most of its Super Bowl ad inventory back in August for $7 million per 30 seconds. The couple extra spots the networks tend to hold back sold in the fall. However, a few sponsors – State Farm Insurance among them – pulled their spots owing to the recent California wildfires, which meant that Fox got another go at them. According to the network, that led to $8 million ad slots being sold. Even the pregame coverage is getting attention, with spots that tended to sell for $2 million fetching $4.5 million.
As of 2024, the most watched sporting events in the world are as follows.
World Cup – 5 billion viewers
Tour de France – 3.5 billion viewers
Cricket World Cup – 2.6 billion viewers
Women’s World Cup – 2 billion viewers
Summer Games – 2 billion viewers
Winter Games – 2 billion viewers
UEFA Champions League Final – 450 million viewers
Super Bowl – 115.1 million viewers
Wimbledon – 25.6 million viewers
NBA Finals – 17.8 million viewers
World Cup of Rugby- 17 million viewers
Kentucky Derby – 16.6 million viewers
The Masters – 15 million Viewers
World Series – 14.73 million Viewers NCAA Final Four – 14.7 million viewers
“Talent sets the floor, character sets the ceiling.”
~ Bill Belichick
Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets. Madison Avenue Securities, LLC | 13500 Evening Creek Drive N, Suite 555 | San Diego, CA 92128 US
