Equities Lower, Yields Higher Last Week

Stocks fell sharply last week as favorable economic data furthered sentiment that the Federal Reserve would keep interest rates elevated for a longer period of time this year. Each of the major benchmark indexes lost value. Looking at market sectors, only energy and health care are advancing, while the remaining sectors ended the week in the red. Crude oil prices rose to levels not seen since October as new sanctions against Russia’s oil sector raised concerns of global supply disruptions. Ten-year Treasury yields ended the week at their highest levels in 14 months. The dollar index closed at its strongest rate since 2022. Gold prices climbed above $2,700.00 per ounce, extending gains for the fourth straight session.

Employment Grew in December              

Employment rose by 256,000 in December, well above the 2024 average monthly gain of 186,000. In December, employment trended up in health care, government and social assistance. Retail trade added jobs in December following a job loss in November. For the full year, employment rose by 2.2 million in 2024, down from 3.0 million in the previous year. The total number of unemployed in December was 6.9 million, a reduction of 235,000 from the November total. The unemployment rate ticked down 0.1 percentage points to 4.1%. After increasing earlier in the year, the unemployment rate has been either 4.1% or 4.2% for the past seven months.

Eye on the Week Ahead

There’s plenty of important economic data released this week. Most of the economic reports will cover December and include annual figures for 2024. Most investors will pay particular attention to the Consumer Price Index, the Producer Price Index and the report on industrial production.