Markets digested corporate earnings this week and lost more ground following last week’s fall. Can markets continue at a sprint or will it begin to slow down the pace?
Monday
S&P 500 -0.76% | NASDAQ -1.20%
Markets attempts at rebounding from last week’s fall were squashed in response to the news of tariffs on Mexico, Canada, and China. There was some ground gained throughout the day as more information came out indicating the tariffs on Mexico and Canada would be postponed for 30 days.
Tuesday
S&P 500 0.72% | NASDAQ 1.35%
Markets saw some light on Tuesday as tariff concerns were shelved, at least for now. Losses were washed out from Monday as the focus shifted towards a slew of earnings data. Job openings saw a noticeable decline in December, which will need to be closely monitored.
Wednesday
S&P 500 0.39% | NASDAQ 0.19%
Services activity compressed in January, but optimism swirled around corporate strength and decent labor market data so far for the first month of the year. The climb out of the artificial intelligence hole from last week has been slow and gradual as Magnificent 7 stocks proposed further investment in the space.
Thursday
S&P 500 0.36% | NASDAQ 0.51%
Major Indexes continue to rise as they crept again towards all-time highs. This followed a scary last week where equity markets saw a significant pullback.
Friday
S&P 500-0.95% | NASDAQ -1.36%
This week has enjoyed a nice run until Friday’s consumer sentiment and unemployment rate was announced. The former showed signs of weakness while the latter fell. If consumer confidence falls, then future earnings could be periled. Unemployment rates at such a low level could indicate a less than accommodative approach to interest rates and squeezed borrowing potential.
Conclusion
S&P 500 -0.24% | NASDAQ -0.53%
Markets got behind early but rebounded on Tuesday after tariff concerns were alleviated for the next 30 days barring any further announcements. The tactic for tariff policy making appears to be shaping into more of a negotiating method in a world where global trade has retaliatory consequences. Perhaps other nations will blink first but only time will tell. We are 19 days into a new administration and, as policies become more defined, analysts will have more data to refine. Economically, however, this level of tariffs doesn’t quite have the historical track record to show if markets will respond unfavorably or not. Manufacturing, job growth and U.S. investment has been a priority for this administration which could have several positive effects on the economy—again, only time will tell. As earnings continue to flow in from corporations, there has been a great sense of optimism about the strengths of balance sheets abroad. While bets are in favor of investment growth in the near-term, a slow jog may be better than a sprint from the start.
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