Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.3%, the S&P 500 was up 1.6%, and the NASDAQ rose 1.9%. Foreign stocks (MSCI EAFE) were also up for the week, rising 0.9%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.17%. (Data source: Wall Street Journal)
Labor Market Continues to Cool
Job growth in the U.S. has slowed substantially, but unemployment has remained steady at 4.4% in December. This is actually considerably lower than the long-term average in the U.S. of 5.5%, so overall, the labor market seems to be in a strong position. Another reason we could be seeing the unemployment number remain this low is due to less immigration into the United States over the past year, which has helped offset slower job gains. Another reason some are saying job growth is slowing is due to AI and its increased capabilities, possibly allowing companies to hire fewer people but get the same work done. We will see how this plays out in 2026 and beyond as companies continue to invest in AI.
Supreme Court Ruling on Tariffs Expected Soon
The Supreme Court is close to making a final decision on tariffs and their legality, which could cause some volatility in markets if they strike them down. It is expected that if they do strike down the tariffs, the current administration will use other methods to continue their tariff policy, such as section 232 (national security) and section 301 (unfair trade practices). In the long term, this is likely not going to impact markets, but the short-term reaction could swing one way or the other.
Lennar Stock Jumps 15% to Start 2026
Lennar stock has jumped 15% to start 2026 as President Trump ordered $200 billion in mortgage bond purchases, helping drive down the 30-year mortgage below 6%. There is some question whether this will help the housing affordability issue because lower mortgage rates could be offset by higher housing prices if demand rises. Home builders, however, will benefit from lower rates as buyers are more likely to look for new houses. Investors are hopeful this climb continues higher after a rough 2025 for the homebuilder stocks. (CNBC)
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Quiz
What was the top performing sector in 2025? (Scroll Down for Answer)
- Technology
- Energy
- Financials
- Healthcare
Answer:
- Technology. Tech was up roughly 25% last year as the AI trade was the major story of 2025. Companies all over increased their AI spend as they are hopeful of a more efficient future for their companies.
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