As we kick off 2026, markets are navigating a mix of steady economic data, policy shifts under the Trump administration, and lingering uncertainties around inflation and labor trends.  This week’s Market Monitor focuses on key U.S. data releases and emerging policy signals. Equity markets showed resilience with modest gains overall, while bond yields remained elevated and commodities, particularly oil, benefited from geopolitical developments.

Market Overview

U.S. equities exhibited choppy but ultimately positive performance amid mixed economic data and policy headlines. Major indexes posted modest weekly advances, reflecting cautious optimism about economic resilience despite softer labor trends. Fixed income markets saw Treasury yields hold relatively steady, while commodities provided strength, led by a notable rally in crude oil driven by discussions around Venezuelan supply dynamics.

Key Economic Releases

This week's reports underscored a U.S. economy that remains resilient in services and productivity but shows signs of cooling in hiring, with inflation pressures appearing contained.

• December 2025 Consumer Price Index (CPI): Headline CPI rose 0.3% month-over-month and 2.7% year-over-year, unchanged from the prior month. Core CPI (excluding food and energy) increased 0.2% monthly, in line with expectations and indicating persistent but manageable underlying pressures.¹
• December 2025 Nonfarm Payrolls and Unemployment:  December nonfarm payrolls added 50,000 jobs, below expectations and following a revised 56,000 in November. The unemployment rate edged lower to 4.4%, the lowest since October 2021, while average hourly earnings rose 0.3%. Overall, 2025 saw the weakest annual job growth since 2003 outside of a recession.²
• Q3 2025 Productivity: Nonfarm business sector productivity, out last Thursday,  rose at a 4.9% annualized pace—the fastest in two years—with output up 5.4% and hours worked increasing modestly. Unit labor costs declined, offering a supportive signal for growth without significant inflationary risk. This gave some hope that AI investments are starting to boost productivity, others are not so sure.³
• ADP December 2025 Jobs and November 2025 JOLTS: The ADP private payrolls report, released Wednesday, January 7, showed a gain of 41,000 jobs, a rebound from November's loss but below forecasts. November JOLTS data indicated hires at 5.12 million and separations slightly higher, reflecting a cooling but balanced labor market.⁴
• December 2025 ISM Services PMI: Released Wednesday, January 7, the index climbed to 54.4 from 52.6, marking 10 consecutive months of expansion and the strongest reading of 2025. The employment component rebounded, highlighting continued strength in the dominant services sector.⁵

Other highlights included the kickoff of Q4 earnings season, with financials under some pressure, with JP Morgan dropping even after a solid quarter, and commentary from Federal Reserve officials emphasizing a data-dependent approach.

Trump's Emerging Interventionist Industrial Policy

The Trump administration has accelerated interventionist measures in early 2026. On January 9, President Trump called for a one-year cap on credit card interest rates at 10%, effective January 20, aimed at easing consumer costs but prompting concerns from banks about reduced credit availability.⁶  Banks were scrambling over the weekend and early this week to come up with countermeasures to the cap.⁷

That same day, Trump hosted a White House meeting with executives from major oil companies, including Chevron, ExxonMobil, and ConocoPhillips, urging at least $100 billion in investments to rebuild Venezuela's energy infrastructure with U.S. security guarantees. While executives expressed interest and some readiness (e.g., Chevron signaling potential quick ramp-up), responses were cautious, with comments that the market remains "uninvestable" without significant legal and commercial reforms.⁸

These moves reflect a broader push toward state-directed economic priorities, which could support certain sectors like energy while distorting others.

Geopolitical Tensions

Geopolitical developments contributed to oil stocks, if not oil prices, rallying, amid ongoing discussions around Venezuelan investments and related supply implications. Manufacturing indicators remained soft, but services sector strength provided overall economic balance. Upcoming data, including retail sales and international inflation readings, will be key to monitoring global sentiment.

Outlook

With inflation stable around 2.7%, robust productivity gains, and services expansion offsetting labor market softness, the economy shows resilience. However, weaker job additions raise caution, and the administration's policy initiatives add uncertainty that could influence sector performance. Our team remains focused on high-quality, diversified positioning.

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Best regards,  

Richard Barnett  

Chief Investment Officer  

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Footnotes:

1 U.S. Bureau of Labor Statistics, Consumer Price Index - December 2025, https://www.bls.gov/news.release/cpi.nr0.htm

2 U.S. Bureau of Labor Statistics, Employment Situation - December 2025, https://www.bls.gov/news.release/empsit.nr0.htm

3 YCharts, Bloomberg News, US Productivity Accelerates to Fastest Pace in Two Years, Vince Golle, 1/8/25

4 ADP National Employment Report and JOLTS data as reported.

5 Institute for Supply Management, Services PMI - December 2025.

6 Reuters, "Trump calls for one-year cap on credit card interest rates at 10%," January 10, 2026, https://www.reuters.com/sustainability/boards-policy-regulation/trump-calls-one-year-cap-credit-card-interest-rates-10-2026-01-10

7 Bloomberg News, Wall Street Scrambles to Defuse Trump’s Credit Card Onslaught, Hanna Levitt and Paige Smith, 1/13/26

8 The Guardian, "Trump promises oil companies ‘total safety’ in Venezuela," January 10, 2026, https://www.theguardian.com/us-news/2026/jan/09/trump-oil-company-executives-meeting-venezuela; POLITICO, "‘Uninvestable’: Trump pitch to oil execs yields no promises," January 9, 2026, https://www.politico.com/news/2026/01/09/venezuela-is-uninvestible-for-now-exxon-ceo-tells-trump-in-white-house-meeting-00720198

Researched and compiled with the assistance of Grok4. This newsletter represents our opined general assessment of the market environment at a specific time and is not intended to be a forecast or guarantee of future performance or results. The opinions and statements expressed are intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities or investment strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are as of January 13, 2026, and are subject to change without notice. Investing involves risks. Past performance is not a reliable indicator of current or future results, and index returns do not account for fees. It is not possible to invest directly in an index.

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