The Monthly Market Wrap provides an insightful analysis of treasury yields, fixed income performance, mega-cap stocks, and key economic indicators in January 2025. It also delves into housing market data and the performance of commodities.
Key Stock Market Index Performance
Equities got off to a strong start in 2025 with positive performances in January. The Dow Jones Industrial Average rose 4.8%, the S&P 500 advanced 2.8% and the Nasdaq Composite added 1.7%. Large-cap Value had the best month among Russell 1000 and Russell 2000 equity styles, increasing 4.5% in January.
With the exception of Technology (-0.7%), all sectors rose in January. The best-performing sector in January was Health Care, which advanced 6.8%.
Economic Data
Employment
The unemployment rate slipped to 4.1% between November and December, and the labor force participation rate remained unchanged at 62.5%. November nonfarm payroll data showed that the U.S. economy added 256,000 jobs this month, the second straight monthly increase and surpassing the expected forecast of 155,000.
Inflation vs. Fed Funds Rate
The US inflation rate inched higher for the third straight month to 2.89%, while core inflation decreased slightly to 3.24%. The US Consumer Price Index rose 0.39% month over month, and US Personal Spending increased by 0.66%.
The Federal Reserve maintained its key Fed Funds Rate target range of 4.25%-4.50% at the FOMC’s January 29th meeting.
Housing Prices and Mortgage Rates
US New Single-Family Home Sales increased 3.6% MoM in December, while Existing Home Sales rose 2.2% MoM. The Median Sales Price of Existing Homes remained unchanged at $404,400 month over month, while mortgage rates rose slightly; the 15-year Mortgage Rate ended January at 6.12%, while the 30-year settled at 6.95%.
Manufacturing and Services
The US ISM Manufacturing PMI improved by another 1.7 points in January to 50.90, boosting the Manufacturing sector into expansion territory for the first time since March 2024. The Services PMI increased 2.0 points between November and December, bringing its latest reading up to 54.10.
Gold and Bitcoin Strikes Again
The price of gold surged 7.8% in January to $2,812.10 per ounce in US Dollars amid intensification of a potential multinational trade war, while the price of Bitcoin surged 13.1% in January, breaking through the $100,000 barrier again to settle at $104,781.50 at the end of the month.
Fixed Income
The yield curve remained largely flat month-over-month, with the largest move across the curve being the 3-month slipping 6 basis points. In bond funds, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) advanced 1.4%.
The yield curve remained largely flat month-over-month, with the largest move across the curve being the 3-month slipping 6 basis points.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.