Read the highlights of this week’s commentary from Helios:

  • The Federal Reserve held rates unchanged at their January policy meeting and maintained a cautious stance towards future rate cuts. Following Fed Chairman Powell’s statement that interest rate cuts in March were unlikely, all three major stock market indices closed significantly lower on the day of the announcement.
  • The January jobs report was a blowout. The economy added 353,000 jobs, the largest gain in a year, and the unemployment rate remained unchanged at 3.7%. November and December’s employment figures were revised upwards, with a combined increase of 126,000 more jobs than previously reported.
  • Treasury yields surged following the report as these strong job numbers will reinforce the Fed’s position on maintaining rates and increase the likelihood that the first rate cut will come after the March meeting.
  • Investor optimism outweighed bets that the Fed would start cutting rates in March. Equities continued to hit all-time highs last week, with the S&P 500 Index approaching 5,000 thanks to bullish outlooks from mega-cap companies including Meta (Facebook) and Amazon.
  • The University of Michigan’s final consumer sentiment index for January surged from December, marking the most substantial monthly increase since 2005 and elevating sentiment to its highest level since July 2021.

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