Weekly Market Recap: January 6, 2025
The first week of 2025 presented a mixed landscape for investors, characterized by market volatility, economic data releases, and political developments.
Market Performance
The S&P 500 experienced a decline of approximately 2% from its mid-December levels, indicating a lack of the anticipated “Santa Rally.” This downturn was marked by weakness in small-cap and cyclical stocks, while domestic mega-cap stocks demonstrated relative strength.
Economic Indicators
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Manufacturing Activity: December’s manufacturing activity exceeded expectations, reaching a nine-month high. The new orders index rose to 52.5, signaling growth in the sector.
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Employment Data: Initial jobless claims fell to a seasonally adjusted 211,000 for the week ending December 28, marking the lowest level in eight months. The four-week moving average also declined, suggesting a strengthening labor market.
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Housing Market: Pending home sales increased for the fourth consecutive month in November, up 7% year-over-year, reaching a 21-month high. This occurred despite rising 30-year fixed mortgage rates.
Political Developments
The week was marked by political events, including a narrow but successful Speaker of the House vote, highlighting potential uncertainties for investors in 2025.
Looking Ahead
Investors are advised to monitor upcoming economic reports, including nonfarm payroll data and job openings, to gain further insights into the labor market’s health. Additionally, keynotes from industry leaders, such as NVIDIA’s CEO at the Consumer Electronics Show, may provide valuable information on technological advancements influencing market trends.
In summary, the inaugural week of 2025 presented a complex environment for investors, with positive economic indicators tempered by market volatility and political developments. Staying informed and vigilant will be essential as the year progresses.
For a more in-depth analysis, you may find the following video insightful: