Month at a Glance

January 2025 set a notable tone for the year with resilience and a dash of volatility across financial markets. This month was characterized by a keen focus on executive actions by the president, amidst economic data releases, earnings season, and a Federal Reserve meeting.

Q4 Earnings: A Promising Start

The quarter's earnings season kicked off with a promising start. Big tech players like Meta, Microsoft, and Tesla reported mixed results. Despite the mixed bag, stocks ended the day higher as investors anticipated Apple's report. Apple exceeded expectations in services revenue, propelling a positive market reaction, despite iPhone sales lagging, indicating a strong finish for tech stocks in January.

Inflation Data: Mixed Signals

December's Producer Price Index (PPI) rose a modest 0.2%, below expectations, providing a glimmer of economic stability. However, the Consumer Price Index (CPI) reflected a slight increase by 0.4%, driven by rising costs in energy, food, and shelter. Surprisingly, the core CPI, excluding volatile categories, registered only a 0.2% rise, highlighting a balance in the inflationary pressure.

Scorching Hot Payrolls and Federal Reserve Reaction

Payrolls for December overshot expectations significantly with 256,000 jobs, yet this economic strength curbed enthusiasm for a rate cut, as the Federal Reserve opted to maintain current rates. The labor market commentary from the Fed remains positive, positioning the economy's job sector in good health.

The Impact of Interest Rates and Market Volatility

Post-inauguration, interest rates stabilized, with the 10-year yield settling near 4.569%. The bond market cooled down following a previous uptick, leading to a steady 30-year mortgage rate near 7.05%. Despite initial market jitters from Deepseek AI's news, markets seemed to recover well throughout the week, reminding investors of the need to focus on long-term plans amidst short-lived volatility spikes.

Your Financial Partner in Uncertain Times

January presented a whirlwind of market-moving events, from robust earnings to evolving inflation scenarios. As we navigate these financial waters, keeping your investment focus on the long term is crucial. If you have specific questions or need tailored advice, our financial team is here to support you through personalized guidance and strategies.