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Executive Summary The S&P 500 rose 0.5% last week to finish at 5,667.56 breaking its four-week losing streak The uncertainty surrounding the trade war will weigh on the economy and capital markets for the foreseeable future. Economists and the public aren’t sure whether to worry about inflation, weakening economic growth, or both. The Summary of Economic Projections (SEP) signals two rate cuts and a higher year-end inflation number Invoking the Alien Enemies Act of 1798 will lead to higher prices U.S. stocks are the only asset class losing money in 2025 The Stock Market The S&P 500 rose 0.5% last week to 5,667.56. The Nasdaq rose 0.2% and the Dow was up 1.2%. The S&P broke a four-week losing streak. It was due for an oversold bounce. We wrote last week, “The S&P is primed to bounce this week, likely at least back to the 200-day moving average residing at 5,740.” The S&P did bounce but only reached 5,715.33 on Wednesday around 3 p.m. Fed Chairman Powell was speaking soothing words at the time to investors during his press conference following the Federal Reserve FOMC meeting. The S&P couldn’t build on Wednesday’s late gains though, although it did try.

Executive Summary • The S&P 500 fell 2.3% last week to finish at 5,638.94 • The S&P is down 4.13% year-to-date • The Nasdaq fell into correction territory and is down 11.6% since mid-February • Market strategists are saying recession risk is rising • Tariffs hurt the economy • Consumers and small business owners are feeling the pinch • The NFIB Uncertainty Index rose to its second-highest level ever in February • The Trump administration is targeting a lower 10-year Treasury Yield • Interesting Charts below The Stock Market

Executive Summary The S&P 500 fell 3.1% last week to finish at 5,770.20 The S&P closed 50 points above the 200-day moving average on Friday A bearish crossover or a “dark cross” indicates a loss of momentum A correction of 10% or more is increasingly likely Founder of AQR, Cliff Asness makes some important observations Interesting Charts below The Stock Market The S&P 500 fell 3.1% last week to finish at 5,770.20, its worst week since September. The S&P is down 1.9% for the year. Technology (XLK) is down 6.01% year-to-date. Consumer discretionary (XLY) is down 8.33%. The other nine S&P sectors are up on the year, led by Health Care (XLV), which is up 8.51%. Consumer Staples (XLP) is the next best-performing sector, up 5.41%. The 10-year Treasury Yield rose to 4.31% from 4.21% last week. The two-year yield was unchanged at 4.01%.

Executive Summary The S&P finished the week at 5,954.50 High government spending has kept the economy growing The S&P has been trading sideways for four months now The Magnificent 7 and technology are out. Healthcare, Financials, Real Estate, and Consumer Staples are in Uncertainty is high Interesting Charts below  The Stock Market The S&P 500 lost 1.0% last week, closing at 5,954.50. The Nasdaq fell 3.4% during the week. Treasury yields continued to fall. The 10-year Treasury closed the week at 4.21%. The two-year Treasury yield dropped to 4.01%. The 3-month yield ended the week at 4.34%. The yield curve inverted once more. The 3M/10Yr curve inversion increases the chance of a recession in the next 12-18 months. Of course, the curve was already inverted until last December when it began to normalize. The 3M/10Yr curve last inverted in late October 2022. The period from October 2022 until December 2024 marked the longest continuous stretch of inversion since 1962. And yet no recession materialized, at least it hasn't yet. The lack of a recession in 2023/24 was most likely because of massive fiscal spending. The federal government has run large deficits since the pandemic. Government spending was $6.9 trillion in 2024, almost 25% of GDP. The government's deficit spending has kept the economy growing.

Executive Summary The S&P finished the week at 6,013.13 Volatility is still low despite last week's rise to 18.21 The tech sector is trailing the S&P More stocks are participating in the U.S. stock market gains International & Emerging markets are outperforming the U.S. markets Interesting Charts below  The Stock Market

Executive Summary The S&P finished the week at 6,114.69 The 2-year yield hit 4.38% after the Consumer Price Index (CPI) was released on Wednesday, but ended the week at 4.27% Investors dumped stocks when the CPI report was released Producer Price Index (PPI) has accelerated for five straight months PPI is a leading indicator of consumer inflation Inflation expectations are rising among fixed-income investors The 5- &10-year breakevens are rising The Stock Market

Executive Summary The S&P finished the week at 6025.99 The S&P has been trading sideways since 11 November Volatility (VIX) has spiked five times since last fall each time falling quickly back to mid-teen levels Microsoft, Alphabet, and Amazon have contributed to the negative tone with cautious guidance The Equity Risk Premium has been falling over the last 14 years Bonds have been a horrible investment over the last three, five, and ten years The jobs market continues to show strength Consumers' inflation expectations are increasing The stock market is expensive and will return less than its long-term average over the next decade Good stock picking will be critical if investors are to earn a return close to the long run average. The equity risk premium is too low which may make Treasury bonds a better investment than stocks on a risk adjusted basis over the next decade. Treasury bonds may outperform stocks over the next decade but not necessarily over the next few years since the 10-Year could rise another 100 basis points in the short term. The Stock Market

Executive Summary The S&P fell 1% last week, closing Friday at 6,040.53 The index hasn’t been able to break clear of resistance The AI space took a big hit Monday Tariffs on Canada, Mexico, and China GDP grew 2.3% annually in Q4 The futures market expected the funds rate to remain at 4.25-4.50% and it did The employment cost index (ECI) for Q4 2024 rose 0.9% QoQ Pending home sales took a hit in December The stock market continues to trend higher There is a relationship between the stock market and the economy More Interesting Charts to review 

Executive Summary The S&P hit a new high on Thursday, reaching 6,128.18. The Volatility Index (VIX) fell to a low of 14.85 The VIX has declined sharply from 27.6 The 5.4% decline from 6 December to 13 January doesn’t qualify as a correction Watch Earnings, Inflation, and Interest Rates for the stock market's near-term direction Don't miss the Charts Worth Seeing at the bottom