Daily market snapshot

Monday 1/5/2026 p.m.

• The U.S. captures Venezuelan leaders: What are the implications – Over the weekend, the U.S. military executed a mission to capture Venezuelan leader Nicolas Maduro and his wife Cilia Flores. They were flown to New York and charged with narco-terrorism conspiracy and other crimes. Perhaps most notably, the U.S. administration has indicated that the U.S. would now run Venezuela until a safe and judicious transition of power takes place. In addition, the U.S. is planning to rebuild the oil infrastructure in Venezuela, with support from major U.S. energy companies.
  
  What are the implications of these actions? From a macroeconomic perspective, we know Venezuela is a relatively small player. Its economy is less than 1% of global GDP, and it represents less than 1% of U.S. and global trade. The country does have about 17% of global oil reserves, but due to failing infrastructure, they deliver just about 1% of global production. Thus, assuming these tensions remain contained, there is likely limited systemic risk to the broader global economy.
  
  However, perhaps the broader implication to monitor is the precedent this action may set globally, especially given that the U.S. plans to retain power in Venezuela until a transition of government occurs. It is still early days, but this will be a longer tail risk to watch, particularly as economies like China and Russia strategize their own next steps.
   
• Market reactions to the Venezuelan actions were muted – As expected, the market reactions to the geopolitical actions in Venezuela were largely contained. Stock markets in the U.S. closed solidly higher, with the Dow Jones leading the S&P 500 and Nasdaq. There was also a rise in safe-haven assets, with U.S. Treasury bonds and gold higher on Monday as well. On the commodity front, we are seeing some upward pressure on oil prices, with WTI crude oil up about 1.8% to around $58.30. However, keep in mind that oil prices started near multi-year lows as oil markets globally continue to face oversupply. Notably, large U.S. oil companies did rise as well, with companies like Chevron, Marathon, and Valero Energy all up 5% - 10% on Monday.
   
• Economic and labor market data in focus this week as well – This week also brings a full slate of economic releases that will offer an updated read on both overall activity and labor‑market conditions. Key reports include ADP private payrolls, ISM Services, JOLTS job openings, and factory orders on Wednesday; initial jobless claims and productivity/unit labor costs on Thursday; and the December non-farm jobs report on Friday*. Recent jobs data has shown mixed signals, with unemployment rising to 4.6%, a four‑year high, but largely for the "right" reasons as more workers re‑entered the labor force*. Friday's report is expected to indicate about 60,000 jobs added, in-line with recent trends of sub-100,000 job growth, and the unemployment rate to tick lower, from 4.6% to 4.5%. Overall, we continue to see a U.S. labor market characterized by a continued low‑hiring, low‑firing environment. We expect monthly job gains to firm modestly into the 50,000–100,000 range, while a smaller labor supply—partly reflecting lower immigration—keeps unemployment near 4.5% in 2026.

Mona Mahajan;
Investment Strategy

^{Sources: *Bloomberg}

Friday 1/2/2026 p.m.

• Stocks kick off 2026 mostly higher - Global equities rose on the first trading day of the year, supported by renewed enthusiasm around AI in China and pro‑cyclical leadership from U.S. small- and mid-cap stocks*. Asian markets set an upbeat tone overnight after DeepSeek published a paper outlining a more efficient approach to AI development, while shares of China’s Baidu advanced on reports that it is preparing to list its AI chip unit in an IPO*. Major indexes in Hong Kong, Korea, Taiwan, and Singapore all recorded fresh highs*. In the U.S., however, semiconductor gains were not enough to keep the Nasdaq in positive territory for the day. There were no major new economic data releases or corporate headlines. As previously announced, Berkshire Hathaway officially named Greg Abel as its new CEO, succeeding Warren Buffett. Meanwhile, silver extended its strong momentum after a standout year that saw precious metals reach new highs*, while oil prices declined following their steepest annual drop since 2020*.
   
• Optimism remains after a strong year - 2025 proved volatile but ultimately rewarding for investors, with global equity markets delivering robust gains. The S&P 500 logged 39 new all‑time highs and returned 18% including dividends, while most international equity markets generated gains of roughly 30%*. Looking ahead to 2026, we anticipate another year of positive returns supported by steady economic growth, modest fiscal stimulus, expected additional Fed easing, and rising corporate earnings. However, as we enter the fourth year of this bull market, investors should also remain mindful of potential risks, such as intermittent AI‑related setbacks and persistent inflation pressures. Following several years of double‑digit gains that have pushed valuations higher, 2026 will likely hinge on earnings growth doing more of the heavy lifting. While returns may moderate, we expect the bull market to continue. AI should remain a key driver, but we also anticipate broader market participation—both within tech and across other sectors and regions—supporting the case for a balanced and diversified portfolio approach.
   
• Busy week of data ahead - Next week brings a full slate of economic releases that will offer an updated read on both overall activity and labor‑market conditions. Key reports include ISM Manufacturing on Monday; ADP private payrolls, ISM Services, JOLTS job openings, and factory orders on Wednesday; initial jobless claims and productivity/unit labor costs on Thursday; and the employment report along with preliminary University of Michigan consumer sentiment and inflation expectations on Friday*. Recent jobs data has shown mixed signals, with unemployment rising to 4.6%, a four‑year high, but largely for the "right" reasons as more workers re‑entered the labor force*. Looking ahead, we see the most likely path as gradual stabilization, characterized by a continued low‑hiring, low‑firing environment. We expect monthly job gains to firm modestly into the 50,000–100,000 range, while a smaller labor supply—partly reflecting lower immigration—keeps unemployment near 4.5% in 2026.
   

Angelo Kourkafas, CFA;
Investment Strategy

^{Sources: *Bloomberg}

The markets were closed on 1/1/2026.

Wednesday 12/31/2025 p.m.

• Markets close 2025 on a soft note – U.S. equity markets slipped on the final trading day of 2025, continuing a sluggish run over recent sessions as markets struggle for direction amid low liquidity and a quiet data calendar*. Still, major benchmarks booked impressive gains over 2025, with the S&P 500 up 16%, the Nasdaq 20% higher, and the small-cap Russell 2000 index rising 11%*. Bond markets were also a little softer today, with the yield on U.S. 10-year government bonds up four basis points (0.04%) after better-than-expected data on U.S. unemployment insurance claims*. Precious metals fell, particularly silver, on the back of announcements of higher margin requirements for these commodities after recent volatility*. Nevertheless, gold prices recorded a huge 64% gain in 2025, with silver up 145% over the year*. Elsewhere in commodity markets, oil prices at $57 per barrel are on track to close the year down a full 20%*.
• Few signs of labor-market distress – A slowdown in nonfarm payrolls this year, alongside a creep higher in U.S. unemployment rates, has prompted concerns that the labor market might be starting to crack. However, initial unemployment insurance claims data released this morning continue to show few signs of rising layoffs*. Instead, new claims were down to 199,000 over the preceding week, one of the lowest readings this year*. Granted, data can be choppy around the holiday season, but even the four-week moving average in claims, which should smooth through some of this noise, remains relatively low around 220,000*. Moreover, continuing claims, a measure of Americans receiving ongoing benefits, has also fallen in recent weeks*. These data should, in our view, help provide optimism that the labor market remains resilient moving into 2026.
• A busy New Year – Following a lull during the holiday season, we should see market liquidity pick up again in the New Year, in our view, helped by a busier news and data calendar. Highlights next week include the eagerly anticipated December labor-market report, ISM survey data, and consumer sentiment. The Fed will likely be watching the labor-market figures particularly closely, as these provide the first clean read of these important data since before government-shutdown disruptions started in October.  Minutes from the central bank's December meeting, released yesterday, highlighted that most FOMC members expect to lower interest rates next year, but some think policy should stay on hold for some time following the recent run of three consecutive rate cuts*. We would likely need to see a very weak labor report to push the Fed toward a rate cut as soon as January, in our view.

James McCann
Investment Strategy 

^{Sources: *Bloomberg}

• Stocks finish little changed – U.S. equity markets closed near the flatline Tuesday, with the S&P 500 on track in on its third consecutive year with an annual gain over 15%.* From a leadership perspective, most sectors finished the day flat to slightly lower, with energy and communication services among the top performers.* Overseas, Asian markets were mixed overnight while European markets traded mostly higher.* Longer-term bond yields ticked higher with the 10-year U.S. Treasury yield climbing to 4.12% while the 2-year yield was little changed at 3.45%.* In commodity markets, precious metals added to strong year-to-date gains with silver gaining 8% and gold rising by 0.4%.  
   
• Bonds reclaim leadership over cash – After underperforming cash in three of the past four years, U.S. investment-grade bonds have gained roughly 7.5% in 2025, outperforming cash by over 3%—the widest margin since 2020.* Treasury yields have declined across most maturities, driven by 0.75% of Fed rate cuts and a cooling labor market, leading to strong performance in U.S. investment-grade bonds.* With yield a key driver of fixed-income returns, the yield advantage of investment-grade bonds over cash has also contributed to their outperformance. Currently, the yield on investment-grade bonds is approximately 0.7% higher than that of cash, placing it near the upper end of its three-year range.* We expect the Fed deliver another one or two rate cuts in 2026, which could put some downward pressure on short-term interest rates and diminish the return potential of cash. However, based on our expectation for steady economic growth and persistent budget deficit concerns, we see limited scope for a decline in long-term yields, with the 10-year Treasury yield likely trading between 4% - 4.5% in 2026. In our view, this could lead to a further widening of the yield advantage between U.S. investment-grade bonds and cash, potentially helping pave the way for another year of bond outperformance. For investors holding excess cash, consider reallocating to other asset classes—such as equities or other fixed-income investments—based on your risk tolerance, investment objectives and time horizon.
   
• Housing market showing signs of stabilization – The Federal Housing Finance Agency (FHFA) home price index rose 0.4% in October, signaling potential stabilization after declines in four of the prior six months.* Similarly, the S&P Case-Shiller 20-city index increased 0.3%, exceeding expectations of 0.1% and marking the largest monthly gain since January.* This follows yesterday’s positive pending home sales report, which reached the highest level since February 2023.* Mortgage rates, while still elevated compared to recent history, have eased from over 7% at the start of 2025 to roughly 6.5%, potentially bringing additional demand to the housing market.* Residential investment has weighed on economic growth, contracting in five of the past six quarters.* With mortgage rates off peak levels, an improvement in housing market activity and investment could provide an additional tailwind for economic growth in the year ahead.*
   

Brock Weimer, CFA;
Investment Strategy

^{Sources: *FactSet}