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leading indicators fell in 2000, 2008, 2020

Stocks Start The Year With Volatility – Domestic Equity Overview

Equities opened the year on uneven footing, as a weakening dollar and uncertainty over future tariffs caused some sectors to lag. Technology and financials stumbled in January, while communication services, industrials, and energy stocks posted stronger performance.

The tech‑heavy Nasdaq Composite experienced the sharpest volatility, with major technology names retreating amid concerns about heavy spending on AI development. Investors rotated toward non‑tech sectors, favoring consumer‑oriented and value stocks throughout January. (Sources: S&P, Dow Jones, Nasdaq)

Fed On Hold – Fixed Income Update

The Federal Reserve held off on cutting its benchmark rate in January, pointing to a stable labor market and a strengthening economy. Many economists challenged that rationale, arguing the Fed may be relying on data distorted by the recent government shutdown and unreliable collection methods. Elevated interest rates continue to strain consumers, particularly those who must borrow to meet basic financial obligations.

Japanese government bond yields spiked briefly in a January “flash crash,” raising concerns about the nation’s financial stability and its capacity to service its growing public debt. Liquidity in sovereign debt markets has increasingly come under scrutiny in recent months as investors reassess the risks associated with government borrowing worldwide. (Sources: Federal Reserve, Treasury Dept., Bloomberg)

Leading Economic Indicators Shift – Domestic Economy

Economists and analysts closely track indicators that signal where the economy may be heading, known collectively as leading economic indicators (LEIs). These data points have historically identified emerging trends, offering insight into future economic growth and broader macro conditions.

Key metrics include manufacturing activity, housing and construction, financial market performance, employment trends, and consumer credit usage. Such indicators have typically foreshadowed shifts in the U.S. economy by roughly three to twelve months. As of early this year, the most widely watched measure—the Conference Board Leading Economic Index, which aggregates ten major indicators—declined more sharply at the end of 2025 than expected, surpassing even the pandemic‑driven drop in 2020.

Past declines in the index have often signaled a recessionary environment, as seen during the downturns beginning in 2000, 2008, and 2020. The underlying components of the index have shown a tendency to shift rapidly in either direction over time. (Source: The Conference Board)

What The Labor Market Is Telling Us – Employment Dynamics Overview

Employers grew increasingly hesitant to hire or post new positions in 2025, creating headwinds for job seekers. Since 2022, the labor market has seen a steady decline in openings and new hires across nearly all sectors of the economy.

December data indicate the labor market remained fragile at year‑end, and the hiring outlook remains bleak. Economists expect another year of limited job opportunities and slowing wage gains, likely intensifying affordability concerns for workers.

Government data collection has been unreliable since the pandemic disrupted traditional business surveys in 2020, weakening visibility into labor‑market conditions. As a result, economists and analysts have relied more heavily on private-sector data from major payroll and employment providers. (Source: Dept. of Labor)

Cryptocurrencies Falling – Digital Currency Market

Cryptocurrencies have tumbled sharply from their highs in the third quarter of 2025, with Bitcoin—the largest and most widely held digital asset—losing more than 45% of its value. Deleveraging has been the primary driver of the market’s latest downturn, as investors who borrowed against crypto holdings have been forced to unwind positions to reduce leveraged exposure.

Some analysts warn that the selloff could spill over into the metals market, as a growing number of crypto‑focused ETFs and similar investment vehicles have accumulated gold and silver as volatility hedges. When deleveraging accelerates, those metal holdings may also be liquidated to cover borrowed positions, adding pressure to precious‑metal prices.

Cryptocurrencies have increasingly behaved like speculative assets rather than hedges against equity‑market volatility or credible alternative investments. Recent geopolitical tensions—including the threat of broader global conflict and a weakening U.S. dollar—are viewed as contributing factors behind the sector’s renewed decline. (Sources: Federal Reserve Bank of St. Louis, Bloomberg)

Global Stock Market Capitalization – Global Equity Market Overview

Stock markets around the world have risen and fallen over the decades, gaining or losing value as equities fluctuate. A range of factors influence national stock valuations, including economic growth, currency movements, interest‑rate trends, and demographic shifts.

The U.S. equity market—which encompasses all stocks traded on the NYSE, Nasdaq, and related exchanges—has held the world’s largest valuation for more than 120 years. Even through the 1929 crash and the ensuing Great Depression, the U.S. market maintained its position as the dominant global equity hub.

From 1988 to 1990, Japan briefly surpassed the United States as the world’s largest stock market. Rapid economic expansion, combined with the fallout from the 1987 U.S. market crash, helped propel Japanese equities to record valuations during the late 1980s. (Sources: Bloomberg, Japan Exchange Group, S&P, Treasury Dept.)

Tax Withholding Changes To Consider For 2026 – Tax Planning

Recently enacted tax legislation is prompting many taxpayers to reduce the amount withheld from their paychecks. Refunds this year are expected to average about $1,000 more, with higher‑income filers likely to see even larger rebates.

A long‑standing misconception is that a large tax refund is beneficial; in reality, it means you overpaid throughout the year and effectively extended an interest‑free loan to the government. The difficulty lies in accurately estimating withholdings after factoring in credits and deductions.

New deductions available for 2026 may further affect withholding calculations by reducing overall tax liabilities. Additions include the credit for taxpayers age 65 and older, a deduction for tip income, and an overtime‑pay deduction. For homeowners, the cap on state and local tax (SALT) deductions has risen from $10,000 to $40,000, which also influences withholding amounts.

Tax professionals recommend submitting an updated W‑4 to avoid receiving an outsized refund next year. The IRS has revised its W‑4 worksheet to reflect the newly available deductions. It’s important to note that underpayments can trigger IRS penalties, including a 7% interest charge on estimated‑tax shortfalls. (Sources: IRS, Tax Policy Center)

Dow Jones	48,892
S&P 500	6,939
Nasdaq	23,461

2 Yr Treasury	3.52%
10 Yr Treasury	4.26%
10 Yr Municipal	2.62%
High Yield	6.52%

Dow Jones	1.73%
S&P 500	1.37%
Nasdaq	0.95%
MSCI-EAFE	5.22%
MSCI-Europe	4.46%
MSCI-Pacific	6.91%
MSCI-Emg Mkt	8.86%

US Agg Bond	0.11%
US Corp Bond	0.18%
US Gov’t Bond	0.0%

Gold	4,909
Silver	85.25
Oil (WTI)	65.74

Dollar / Euro	1.19
Dollar / Pound	1.38
Yen / Dollar	153.13
Canadian /Dollar	0.73

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