Desla's Weekly Market Update: January 13, 2025

Desla's Weekly Market Update: January 13, 2025

 

Hot Jobs Report Triggers Market Shifts and Federal Reserve Policy Adjustments

 

Market Performance 

The past week saw declines across all three major indices, driven by ongoing uncertainty surrounding the Federal Reserve’s next steps. Additionally, a hot jobs report spooked market performance, creating concerns about Federal Reserve policy and its potential impact on the economy.

 

• S&P 500: Experienced a slight decline as markets adjusted to the “higher-for-longer" interest rate scenario, which influenced growth-oriented sectors like technology and consumer discretionary. 
• Dow Jones: Posted a noticeable pullback, as rising interest rate yields impacted financial & technology companies, two key components in the index. 
• NASDAQ: Registered a marginal decrease, initiated by higher rates in the technology sector. A sell-off occurred due to elevated valuations reducing the present value of future earnings.  

 

Economic Overview 

Markets adjusted to shifting expectations around Federal Reserve Policy. The latest jobs report, indicating employment growth, intensified these adjustments.

 

• Federal Reserve Policy: Year-end 2025 rate expectations rose to nearly 4%. The consensus is that elevated rates will persist longer than initially anticipated.  
• Stock Valuations: As of last week, U.S. stocks were “priced for perfection,” with valuations reflecting optimistic growth and earnings projections. This heightened risk follows a rapid appreciation in stock prices over the past year, along with the potential for tighter monetary policy in response to sustained economic growth.

 

Sector Highlights 

Recent market volatility impacted each sector in varying ways.

 

• Technology: Faced notable downturns due to valuation pressures and the impact of higher interest rates.  
• Energy: Benefited from sustained demand and potential global supply constraints, contributing to sector gains. 
• Consumer Discretionary: Weakened as rising interest rates reduced consumer spending, particularly on non-essential goods and services. 

 

Desla’s Insight

At Desla Wealth Management, we go beyond the headlines to assess what these developments mean for your investments. Here are this week’s insights:

 

• Tactical Adjustments: Given the recent market trends, we’re focusing on increasing allocations to companies with reasonable valuations and growing dividends.
• Growth Opportunities: Our Ten Stock Growth Strategy continues to identify standout companies with earnings momentum and strong leadership, which we believe are well-positioned for mid- to long-term gains.
• Economic Outlook: We remain vigilant in monitoring interest rate changes & Federal Reserve decisions and adjusting strategies to manage risk and capture potential opportunities.

 

By leveraging our deep market knowledge and personalized approach, we aim to help you stay confident in your financial journey, no matter how the markets move.

 

If you’re unsure about the level of risk in your portfolio or want to better understand your current investment exposure, please reach out to us for a comprehensive portfolio review. We’ll provide you with a full analysis to ensure your investments are aligned with your financial objectives and risk tolerance.

 

Stay informed by subscribing to our Insights Page on our website under Free Resources.  for weekly updates as we continue to monitor market conditions and adjust our strategies accordingly. With our guidance and dedication to your financial success, we aim to help you make well-informed decisions during periods of market fluctuation.