Weekly Market Bullets

for the week ending 1/31/2025

• US Equity Markets fell last week as fears of the impact of a Chinese AI platform DeepSeek on technology firms rattled investors. The S&P 500 dropped 1.0% for the week and is now up 2.7% for the year. The Nasdaq declined 1.6% for the week to bring its gains for the year to 1.6% for the year, while the Russell 2000 (small cap stocks) fell 0.9% for the week and is now up 2.6% for year.

• Global Equity Markets rose last week, helped by a rate cut by the European Central Bank (ECB) that pushed European equities to new highs. Developed Markets rose 1.0% for the week and are now up 5.2% for the year. Emerging Markets were up 0.5% for the week to bring its gains to 1.9% for the year.

• Interest Rates moved lower last week despite the Fed's decision not to cut rates. The Fed met last week and, as expected, left interest rates unchanged and suggested it may take some time before lowering rates again. Despite that, the yield on the US 10-Year Treasury closed the week at 4.55% vs. 4.62% the prior week. Investors are currently pricing in 1-2 rate cuts by the Fed in 2025.

• History suggests that, when equity returns for the month of January are positive, the full year returns are also positive. While there can be significant variability in returns, the S&P 500 has posted positive full year returns 79% of time when the month of January is up. The average return in such years has been 16.9%. By contrast, when the month of January has negative returns, the S&P 500 is down 60% of the time for the full year, with the average decline being 1.7%. With the S&P 500 up 2.7% in January 2025, let's hope that history repeats itself this year.

Market Data

for the week ending 1/31/2025