February 4, 2025

The communication services sector had the largest percentage gain last week, climbing 4.2%, followed by a 3.9% increase in energy and a 1.7% advance in utilities. Consumer staples, financials, industrials, and financials also edged higher. The advance in the energy sector came as crude oil futures reached a four-month high this week amid geopolitical tensions. Chevron (CVX) and Exxon Mobil (XOM) were among the sector's best performers as both companies reported better-than-expected fourth-quarter results amid higher oil output. 

 

Source: https://www.jhinvestments.com/market-intelligence 

Topics of the Week:

  • Trade Realignment: In a major shift, the U.S. reduced tariffs on India to 18% after Prime Minister Modi agreed to stop purchasing Russian oil.

  • Confidence in Inflation Trends: Further, the Federal Reserve has expressed confidence that price increases caused by tariffs will be "transitory," or temporary, suggesting they may not pose a long-term threat to the economy.

 

What We Are Watching:

  • Unsustainable National Debt: Federal debt levels are viewed as being on an "unsustainable path." While this isn't expected to cause immediate market disruptions, it remains a significant long-term concern that will eventually require action.
  • Increased Rollover Risk: The government is relying more on short-duration bills — short-term loans that must be paid back quickly. This increases "rollover risk," or the risk that the government will have to frequently refinance its debt at higher interest rates.

 

Index Data & Market Performance 

 

Data as of Market Close 1.25.25 

source: gemini.google.com*

In Focus

Economic Data Delays: A partial government shutdown has postponed the highly anticipated January Jobs Report (originally due Friday, Feb 6). Earnings season results continue to roll in; roughly 129 S&P 500 companies are scheduled to report this week. Recent reports from Disney showed weakness, with shares sinking 7.4% on Feb 2. Markets are monitoring a new U.S.-India trade deal announced by President Trump, which may impact oil flows by requiring India to scale back Russian crude purchases.

A partial government shutdown has postponed the highly anticipated January Jobs Report (originally due Friday, Feb 6). However, most of the key reports this week are focused on jobs.

Tuesday – JOLTS Job Openings

Wednesday – ADP Employment Report

Thursday – Weekly Jobless Claims

Friday - January Jobs Report

What's Trending

A Strategic Pause

At last week’s Federal Open Market Committee (FOMC) meeting, the Committee delivered what could be described as a dovish hold: policy is “well positioned,” the economy looks solid, there were “some signs” of stabilization in the labor market, and the Fed is confident that tariff-induced inflation will be transitory. Ultimately, the FOMC voted 10–2 to keep rates unchanged.

Key points you need to know about the Fed:

  • The main message from the January FOMC meeting was that better growth news and early signs of labor market stabilization left the Committee feeling neutral.
  • The Committee remains pretty divided on the future path of interest rates.
  • Bottom Line: We should not expect any change in policy at the next FOMC meeting in March. That said, we expect the first cut will come later this year, as inflation should decelerate with housing pressures easing and businesses moving past tariff pass-throughs

 

New Fed Chair

President Trump has now nominated Kevin Warsh to succeed Chair Powell, positioning a policy‑discipline advocate to inherit elevated debt levels, politically sensitive rate decisions, and deepening Fed–Treasury interdependence. With five years of history on the Board of Governors under the Bernanke Fed, Kevin Warsh was known as Bernanke’s bridge to Wall Street during times of crisis. Less an Academic, more a battle-tested Financier. Warsh is also known as a critical thinker and should have no problem getting confirmed. He will not likely act as a yes-man. 

Disclosures

*The data for the total returns of the S&P 500, Dow Jones 30, and NASDAQ Composite are compiled and published by several financial news outlets, index providers, and government/academic sources.

Based on typical financial data providers and the search results, here are the likely sources for this data:

  • S&P Dow Jones Indices (S&P Global): This is the official index calculator for the S&P 500 and the Dow Jones Industrial Average (DJIA). They publish index data, including total returns, in daily, weekly, and monthly reports/commentary.
  • Nasdaq Global Indexes: They are the official index calculator for the NASDAQ Composite. They also publish fact sheets and performance reports with total return data.
  • Financial News Agencies and Publications: News outlets like The Associated Press (AP) and financial publications like Investopedia regularly report on the daily, weekly, and year-to-date (YTD) returns of these major U.S. indexes.
  • Federal Reserve Economic Data (FRED) / St. Louis Fed: FRED, maintained by the Federal Reserve Bank of St. Louis, is a public resource that often includes daily closing levels for indices like the S&P 500, which can be used to calculate returns.
  • Financial Data Platforms (e.g., Bloomberg, YCharts, MSCI): Professional and commercial financial data providers often republish or calculate returns based on the official index data for their clients.