Weekly Economic Update
Last Week and the Economy
- The U.S. entered Venezuela.
- DOL data showed that layoffs declined for the week.
- Mortgage rates dropped to the lowest level in 2025.
The major U.S. stock indices slumped during the shortened New Year’s week. The Nasdaq Composite declined by 1.52% while the S&P 500 and Russell 2k Small Cap Index both reported losses of 1.03%. The Dow Jones Industrial Average fared slightly better, declining by just 0.67%. On the other hand, the MSCI-EAFE Index – which tracks international stocks – recorded a gain of 0.51%.
The U.S. Entered Venezuela
On Saturday, the U.S. struck Venezuela and captured President Nicolás Maduro along with his wife. The couple are now in New York, awaiting trial for drug trafficking and gun charges.
Prosecutors say that Maduro is the head of the Cartel of the Suns, who run a smuggling operation moving cocaine from Columbia to the U.S. and Europe. The accusations are not new, as Maduro had a $50 million bounty on his head and was accused of narco-terrorism in a U.S. indictment unsealed in 2020.
Following Maduro’s arrest, the U.S. will seemingly maintain a presence in the country with President Trump saying, “we’re in charge.” Early signs show that this continued involvement in the governing of Venezuela may have positive effects for certain stocks. Chevron, the sole U.S. oil company operating in the country, rose about 8% in premarket trading, and global defense stocks rose following the increased geopolitical tensions.
Layoffs Declined for the Week
The Department of Labor [DOL] released a report on unemployment claims for the week ending December 27th, which is commonly used to estimate the number of layoffs nationwide. The data showed that 199,000 people filed initial claims for unemployment insurance, a decline of 16,000 from the previous week after seasonal adjustment.
The report also included the number of continuing unemployment insurance claims, which was 1.97 million. This was about 113,000 more unemployed people than in the same week in 2024.
More information about the labor market will be released next week with ADP’s National Employment Report on Wednesday and the Bureau of Labor Statistics’ Employment Situation on Friday. This data is expected to play a pivotal role in the Fed’s interest rate decision later this month.
Mortgage Rates Dropped to the Lowest Level in 2025
Freddie Mac released new data showing that the average 30-year fixed mortgage was issued at a rate of 6.15% the week ending December 31st. This was 0.03 percentage points lower than the previous week and the lowest average rate in 2025.
30-year mortgage rates peaked at over 7% in January, then steadily declined throughout the year. They fell notably following multiple Fed rate cuts in the fall and averaged 6.59% for the year as a whole.
Q4 Equities Review
The fourth quarter brought two interest rate cuts from the Fed – at the October and December meetings. It also contained the longest government shutdown in U.S. history from October 1st to November 12th. The lapse in appropriations delayed numerous economic reports, and investors are still lacking some key pieces of data from this time frame.
The performance of U.S. stocks was uncertain at times throughout the quarter, but all the major stock indices ended the quarter in positive territory. The Dow Jones Industrial Average posted the largest gain at 3.59%, and the Nasdaq Composite was not far behind with a gain of 2.57%. The S&P 500 and Russell 2k Small Cap Index ended the quarter 2.35% and 1.86% higher, respectively. International stocks, represented by the MSCI-EAFE index, outperformed and rose by 4.54%.
2025 Equities Review
Following strong stock market performance in 2024, U.S. companies reached new heights in 2025. Advances in artificial intelligence dominated headlines, with some pundits predicting sustained growth while others forecast a bubble.
Tariffs were also a source of widespread concern in 2025 – both for businesses and consumers. Numerous changes were made to international trade policy after the announcement of “reciprocal tariffs” in April, and the effects of these policies has proved difficult to measure. Fed Chair Jerome Powell summarized the impact by stating that baseline prices have risen, and those increases could continue to be realized throughout the first half of 2026.
The Nasdaq Composite recorded the best performance in 2025, with a gain of 20.36%. The S&P 500 and Dow Jones Industrial Average also reported notable gains of 16.39% and 12.97%, respectively, while the Russell 2k Small Cap Index notched an 11.29% gain for the year. The MSCI-EAFE index once again outperformed U.S. stocks, rising by an impressive 27.89%.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Key Economic Data Points
| Data Point | Date | Current | Change from Prior | Next Report |
| Unemployment Rate | 11-2025 | 4.6% | 0.2 | January 9th |
| FOMC Target Rate | 12-2025 | 3.50% – 3.75% | -0.25 | January 28th |
| GDP | Q3 | 4.3% | 0.5 | January 22nd |
| PCE Inflation | 9-2025 | 2.8% | 0.1 | January 31st |
Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed, U.S. Bureau of Economic Analysis
Weekly Quote:
Successful investing is anticipating the anticipations of others.
-John Maynard Keynes, Economist
The Week Ahead – Economic Data & Events
Monday: ISM Manufacturing
Wednesday: ADP National Employment Report, Global Supply Chain Pressure Index (GSCPI), ISM Non-Manufacturing, JOLTS, Manufacturing, Shipments, and Orders
Thursday: Advance International Trade in Goods, Initial Claims, Trade balance, Wholesale Trade, Survey of Consumer Expectations
Friday: Employment Situation, Michigan Consumer Survey (Preliminary)
Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Thursday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday)
Source: New York Fed
The Week Ahead – S&P 500 Companies Reporting Earnings
Wednesday: Constellation Brands (STZ)
Thursday: Lamb Weston Holdings (LW), Conagra Brands (CAG)
Friday: Paychex, Inc. (PAYX)
Source: Select Sector SPDRs Earnings Calendar
Weekly Tip:
Try the “24-hour” rule.” Wait 24 hours before any nonessential purchase over $50 to curb impulsive spending.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Last Week's Riddle and Answer
Last Week's Riddle:
Two men are playing chess. They play five games, and each man wins the same number of games. What's the catch?
Last Week's Answer:
The two men were playing different opponents.
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