Stocks down with US Jobs report, CPI and Earnings this week

Macroeconomic/ geopolitical developments

• U.S. and global equities faced a turbulent start to the year, with major U.S. indexes posting steep losses amid inflation concerns, Federal Reserve uncertainty, and political transitions, while European markets edged slightly higher on rate cut expectations.
• President-elect Donald Trump’s conflicting signals on tariff policy, including reports of a narrower focus on critical sectors and his insistence on broad measures, have sparked market volatility and raised concerns about economic and international trade impacts.

• Minutes from the Federal Reserve’s December meeting revealed a cautious approach to further rate cuts, as policymakers highlighted rising inflation risks, uncertainty over the incoming Trump administration’s economic policies, and the need to assess the strong labor market’s resilience amid potential headwinds.
• December’s robust U.S. jobs report, with 256,000 jobs added and unemployment falling to 4.1%, signaled economic strength but spurred a market selloff as rising Treasury yields and revised Federal Reserve rate expectations weighed on stocks.

• This week, markets will focus on key US inflation data, including December’s CPI and PPI reports, alongside the kick-off of fourth-quarter earnings season led by major banks, as both are poised to influence the economic and monetary policy outlook for 2025.

Global financial market developments

• US and global equity averages mostly moved lower.
• US and European bonds sold off to higher yields
• The US Dollar Index pushed still higher, to a multi-year high.
• Gold futures rallied, to the upper end of a multi-week range.
• Oil futures rallied to multi-month highs.

Key this week

Central Bank Watch: Central Bank activities this week are modest, with key focus on speeches from Fed officials.

Macro Data Watch: The main macro data release this week is the US Inflation data on Tuesday (PPI) and Wednesday (CPI) . Some other releases of note are the UK inflation reports on Wednesday, plus Chinese GDP and EU CPI on Friday.

Earnings Watch: The Q4 earning season kicks off on Wednesday with the Financial Banks releasing their earnings on Wednesday and Thursday.

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Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued