2025 | January 13

The Markets

Stocks Retreat

The major U.S. stock indexes fell around 2%, recording their second weekly declines in a row as investors worried about a potential slowdown in the pace of interest-rate cuts. It was the fourth negative week out of five for the S&P 500, which finished down more than 4% from a record high set on December 6.

In the wake of Friday’s stronger-than-expected jobs report, the yield of the 10-year U.S. Treasury note surged to the highest level in more than 14 months, climbing as high as 4.79% on Friday morning before closing around 4.77%. The recent spike reflects growing market expectations that the U.S. Federal Reserve may only approve a single rate cut this year.  

The U.S. labor market remains resilient, as December’s jobs gain of 256,000 was roughly 100,000 more than most economists had expected. The result capped a year that generated an average monthly gain of 186,000 jobs. December’s unemployment rate slipped to 4.1% from 4.2% the previous month.  

Yields of the United Kingdom’s debt jumped to their highest levels in decades amid worries about government borrowing and economic weakness. On Thursday, the yield on the 30-year gilt hit more than 5.45%, the highest since 1998. The yield of the 10-year gilt reached 4.92%, the highest since 2008.  

As major banks prepare to open quarterly earnings season, analysts on Friday expected that fourth-quarter earnings per share for all companies in the S&P 500 rose by an average of 11.7%, according to FactSet. The firm reported that 71 companies recently scaled back their earnings expectations versus 35 that issued positive guidance. 

Dividend payments by companies in the S&P 500 rose in 2024. The net indicated dividend rate—dividend increases announced by companies minus decreases—rose to $53.3 billion from $36.5 billion in 2023, according to S&P Dow Jones Indices. The firm’s annual forecast projects an 8% increase in overall dividend payments this year relative to 2024.

A Consumer Price Index report scheduled for release on Wednesday will show whether a recent trend of slightly hotter-than-expected inflation extended into December. Last month’s CPI report showed an annual rate of 2.7% in November, up from 2.6% the previous month—a further indication of recently uneven progress in bringing inflation closer to the Fed’s 2.0% long-term target.

Source: John Hancock Investment Management

Bull and Bear Cycles

How Much Do You Know?

Last year, Pew Research asked adults across the United States how much they knew about personal finance, a topic that includes “managing your money as well as saving and investing. It encompasses budgeting, banking, insurance, mortgages, investments, and retirement, tax, and estate planning,” reported Will Kenton of Investopedia.

More than half (54%) of those who participated in the survey said they knew a great deal or a fair amount about personal finance. However, the results varied widely depending on the demographic attributes considered. For example, knowledge about money appears to increase with age, reported Khadijah Edwards of Pew Research Center. For example:

• Ages 18 to 29: 41% know at least a fair amount
• Ages 30 to 49: 47% know at least a fair amount
• Ages 50 to 64: 60% know at least a fair amount
• Ages 65 & older: 67% know at least a fair amount

Extrapolating that result suggests that about two-thirds of Americans may know a fair amount about personal finance as they approach retirement. Many survey participants learned what they knew about money from family and friends. Others said they relied on:

• The internet
• A college or university course
• Media (news, documentaries, and books)
• Elementary or high school classes.

When asked about various issues related to finances, respondents were more confident in their ability to accomplish some tasks than others. For example, participants were confident they could:

• Find their credit report: 75%
• Make a monthly budget: 59%
• Develop a plan to pay off debt: 57%
• Create a plan to save money: 56%
• Build an investment plan to grow wealth: 27%

If you have friends or family members who would benefit from knowing more about how to manage, save, and invest money, gifting a subscription to a personal finance publication could make a difference. You’re also welcome to share our contact information. We help people pursue their financial goals. 

Phone: (615) 709-8709

Fax: (615) 505-3306

eMoney

Charles Schwab

Advyzon

Emily Triano

Operations Manager

emily@ajadvice.com

Maya Laws

Operations Associate

maya@ajadvice.com

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