Recap: Week 1, 2025 - Still bearishly fearful

How the market’s feeling?

These numbers reflects late December 2024's "Fear" environment for both major indices. However, remember that sentiment indicators are just one of many tools used for market analysis and shouldn't be used in isolation for making investment decisions.

What’s causing it?

Note:

• Initial Jobless Claims ⬆️ = fewer claims (a good thing 👍️)

• Oil Stock ⬆️ = smaller deficit (a good thing 👍️)

Manufacturing Numbers (Chicago PMI & ISM Data)
When manufacturing slows down (like we're seeing with a 36.9 PMI), it often leads to higher prices at stores. The new iPhone, your favorite home goods, or even basic things might get more expensive. Companies might also slow down hiring or cut jobs, which affects local businesses and communities.

Housing Market (Pending Sales & Price Index)
The 2.2% increase in pending home sales with 4.2% price growth means:

• Your rent might go up as property values increase

• If you're saving for a house, you'll need a bigger down payment

• If you own a home, your property value is likely increasing

Job Market (Jobless Claims)
The 211K new jobless claims (lower than expected) suggests a relatively stable job market. This affects:

• Your job security

• Your ability to negotiate for better pay

• How easy it is to find a new job (if you're looking)

Oil Inventory Changes (-1.442M)
This directly impacts:

• Gas prices at the pump

• Flight prices

• Delivery fees (because companies pass fuel costs to customers)

• Heating and A/C bills

Construction Spending (0.0%)
The flat construction spending means:

• Fewer new apartments = continued high rents

• Less commercial development = fewer new local businesses

• Reduced job opportunities in construction and related fields

Manufacturing Prices (52.5)
When this number goes up:

• Everyday items get more expensive

• Companies might shrink product sizes while keeping prices same (we see you Whole Foods, and Trader Joe’s

• Your dollar buys less at the store

So, image for a moment that you're planning to move to a new apartment next year. These numbers suggest you might face:

1. Higher rent due to housing market pressure

2. More expensive moving costs due to fuel prices

3. Higher prices for new furniture or appliances due to manufacturing costs

4. But at least the stable job prospects may help you afford it all

The important thing to remember is that these numbers don't exist in isolation - they all work together to affect your cost of living, job prospects, and financial decisions.

What’s happening this week?

Key Events to Watch:

• FOMC Meeting Minutes (Wednesday)

• Initial Jobless Claims (Thursday)

• Nonfarm Payrolls and Unemployment Rate (Friday)

Services PMI and Non-Manufacturing PMI tell us how well businesses like restaurants, banks, and tech companies are doing. They're beating expectations (58.5 vs 56.1), suggesting people are still spending money on services.

JOLTS Job Openings is like a nationwide LinkedIn job board report. With 7.77M openings, it shows there are still plenty of jobs available despite recent tech layoffs.

ADP Employment and Nonfarm Payrolls are two major jobs reports. They're both coming in lower than expected (131K vs 146K and 154K vs 227K), which might mean companies are slowing down their hiring.

FOMC Meeting Minutes is basically the Fed's group chat summary about interest rates and the economy. Traders watch this closely since it affects mortgage rates and business loans.

The Unemployment Rate holding steady at 4.2% is like a national "you're hired/fired" score. A stable rate suggests the job market isn't getting worse, but also isn't improving much.

Average Hourly Earnings (0.3% vs 0.4%) shows how much wages are growing. This slightly lower number suggests your next raise might be smaller than last year's.

Think of this week's data like checking your city's economic vital signs - jobs are available but companies are hiring more cautiously, wages are growing but more slowly, and service businesses are doing better than expected.

What levels are we watching this week?

Remember:
When price goes down, short-sellers are the first to buy (cover) because it’s a risk-off trade, followed by wholesale market makers. More on this in our free eBook we’re publishing this week.

The boring, legal stuff

This newsletter is like your friend who's really into stocks and crypto – they share cool market insights over drinks, but they're not your financial advisor.

Everything we send to your inbox is meant to educate and entertain. While we strive to keep you informed about market trends and opportunities, none of this content should be considered financial advice. We're not telling you what to do with your money – that's a conversation for you and your qualified financial advisor.

Trading and investing carry substantial risks. Your decisions about where to put your money should be based on your own research, financial situation, and risk tolerance. Past performance of any investment doesn't guarantee future results – just like how your favorite restaurant's amazing dinner special last week doesn't guarantee it'll be just as good next time.

Remember: Do your own research, never invest more than you can afford to lose, and always consult with a licensed financial professional before making investment decisions.

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