AE Wealth Management: Weekly Market Insights | 1/4/26 – 1/10/26
Weekly Market Commentary
THE WEEK IN REVIEW: Jan. 4-10, 2026
Market advances to start 2026
Markets started the first week of 2026 with a vengeance, with the Dow and S&P 500 setting new highs on both Tuesday and Friday.1,2 The stimulus for the upward movement appeared to be the arrest and extraction of Venezuela’s President Nicolas Maduro, who had been indicted for drug trafficking and other things by the U.S. Justice Department.3
The situation had been escalating over the past few months, with the U.S. military blowing up suspected drug boats in the Caribbean and seizing oil tankers suspected of transporting sanctioned Venezuelan oil.4 There is an entire history lesson here, going back to the birth of U.S. foreign policy in the Western Hemisphere and including such events as the Monroe Doctrine, the Spanish-American War, the Banana Wars and even the Cuban missile crisis. But this isn’t the place for a history discussion, so we’ll focus on the market reaction.
Usually, when there is a major geopolitical event, markets are muted or pull back until the situation can be properly assessed. That happened with Russia/Ukraine, the Israeli/Gaza situation and even the bombing of Iran’s nuclear facilities. Not so with the Maduro situation. Markets moved robustly to the upside and, refreshingly, it wasn’t just Big Tech and AI companies leading the charge for a change. Energy, retail and banking all moved upward on hopes there would be opportunities in a Venezuela that was more aligned with the U.S. and that the alignment would potentially spread across the region.
It’s not all rosy news, however. We still have the very real potential of a government shutdown by the end of January. Plus, the situation in Iran is becoming more unstable, and we have to see what the Supreme Court rules on tariffs. We’ll take all these developments as they come.
But here’s a happy thought: The “Santa Claus” period, the first five days indicator and the January barometer all add up to represent the January indicator trifecta.5,6 When the S&P 500 rises during all three periods, the index has historically finished the year higher the vast majority of the time. After one full week of 2026, we are two for two, but a lot can happen over the next three weeks. So far, the odds are in our favor — and that’s always a great way to start off a new year!
Job growth remains anemic
The ADP employment report with December numbers came in below expectations last week, adding 41,000 jobs compared to the consensus estimate of +47,000.7 And the Labor Department’s Job Openings and Labor Turnover Summary (JOLTS) report, which lags by a month and tracks the monthly change in job openings and provides rates on hiring and quits, showed openings continued to decline.8 There were 7.15 million actual openings in November versus the 7.65 million consensus expectations, and the number was lower than the prior revised reading of 7.45 million.
Then we had the Bureau of Labor Statistics (BLS) employment situation for December on Friday.9 The report showed we created 50,000 jobs last month, down from the consensus estimate of +55,000. The unemployment rate dipped to 4.4% after November’s rate was revised downward from 4.6% to 4.5%.
Meanwhile, wage growth is picking up and is running at 3.8% year-over-year, outpacing the consumer price index (CPI) at 2.7%.10 It’s a rough comparison, but it appears incomes are rising faster than prices, which is always a good thing. Maybe we can finally begin climbing out of the “affordability” hole.
Mortgage rates are dropping, also, but home prices remain stubbornly high and continue to be a pain point. When combined with weak job growth and a steady unemployment rate, markets saw another opportunity to start the conversation about Federal Reserve rate cuts (although it seems unlikely the Fed will cooperate at this point). Rate-cut chatter will likely continue to ramp up, especially if we see improvement with inflation this week.
Coming this week
- Monday is scheduled to be quiet, with a couple of Fed speakers scheduled.
- New inflation data will be released on Tuesday, with the latest CPI and core CPI numbers. We’ll also get new home sales and more Fed speakers.
- Wednesday will feature the producer price index (PPI) and core PPI to complete inflation reporting this week. Other data on Wednesday will include retail sales, existing home sales and MBA mortgage applications. And Fed speakers will continue their circuit.
- Things start winding down on Thursday with the Philly and New York Fed manufacturing survey. We’ll also see weekly unemployment, which may still be a little wonky given the holidays. And, of course, we’ll hear from more Fed speakers.
- Friday will be fairly quiet — except for Fed speakers!
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | 1.57% | 1.76% | 17.71% | 21.42% | 12.74% |
| NASDAQ | 1.88% | 1.85% | 21.52% | 30.56% | 12.39% |
| DJIA | 2.32% | 3.00% | 16.11% | 13.88% | 9.74% |
Interest Rates: | |||||
| 1/9/2026 | 1/2/2026 | ||||
| UST 10 YR Government Bond Yield | 4.17% | 4.20% | |||
| Germany 10 YR | 2.83% | 2.91% | |||
| Japan 10 YR | 2.10% | 2.07% | |||
| 30 YR Mortgage | 6.16% | 6.20% | |||
| Oil | $59.12/ppb | $57.32/ppb | |||
| Regular Gas | $2.80/ppg | $2.82/ppg | |||
| All data as of Jan. 9, 2026. | |||||
Sources:
1 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed Jan. 11, 2026.
2 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed Jan. 11, 2026.
3 Victor Loh. CNBC. Jan. 7, 2026. “Venezuela says 100 killed in U.S. military operation that captured Maduro.” https://www.cnbc.com/2026/01/07/us-venezuela-military-operation-maduro-injuries-casualties.html. Accessed Jan. 11, 2026.
4 Ben Finley, Konstantin Toropin and Regina Garcia Cano. PBS News. Jan. 3, 2026. “A timeline of U.S. military escalation against Venezuela leading to Maduro’s capture.” https://www.pbs.org/newshour/world/a-timeline-of-u-s-military-escalation-against-venezuela-leading-to-maduros-capture. Accessed Jan. 11, 2026.
5 Joseph Adinolfi and Isabel Wang. Morningstar. Jan. 4, 2026. “Investors pin hopes on the ‘January barometer,’ with stocks set to skip ‘Santa Claus rally’ for a third straight year.” https://www.morningstar.com/news/marketwatch/20260104100/investors-pin-hopes-on-the-january-barometer-with-stocks-set-to-skip-santa-claus-rally-for-a-third-straight-year. Accessed Jan. 11, 2026.
6 Fidelity. Feb. 7, 2025. “The January barometer.” https://www.fidelity.com/viewpoints/active-investor/january-barometer. Accessed Jan. 11, 2026.
7 ADP Research. “ADP® National Employment Report.” https://adpemploymentreport.com/. Accessed Jan. 11, 2026.
8 U.S. Bureau of Labor Statistics. Jan. 7, 2026. “Job Openings and Labor Turnover Summary.” https://www.bls.gov/news.release/jolts.nr0.htm. Accessed Jan. 11, 2026.
9 U.S. Bureau of Labor Statistics. Jan. 9, 2026. “The Employment Situation — December 2025.” https://www.bls.gov/news.release/pdf/empsit.pdf. Accessed Jan. 11, 2026.
10 U.S. Bureau of Labor Statistics. Dec. 18, 2026. “Consumer Price Index Summary.” https://www.bls.gov/news.release/cpi.nr0.htm. Accessed Jan. 11, 2026.
AE Wealth Management, LLC (AEWM) is an SEC Registered Investment Adviser (RIA) located in Topeka, Kansas. Registration does not denote any level of skill or qualification. The advisory firm providing you this report is an independent financial services firm and is not an affiliate company of AE Wealth Management, LLC. AEWM works with a variety of independent advisors. Some of the advisors are Investment Adviser Representatives (IAR) who provide investment advisory services through AEWM. Some of the advisors are Registered Investment Advisers providing investment advisory services that incorporate some of the products available through AEWM.
Information regarding the RIA offering the investment advisory services can be found at https://adviserinfo.sec.gov/.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information and opinions contained herein, provided by third parties, have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by AE Wealth Management.
This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. None of the information contained herein shall constitute an offer to sell or solicit any offer to buy a security or insurance product.
1/26 – 5002803-2