Despite a rough journey that led the major averages deep into the red at one point. Yuuge gains Friday to close the week saw the Dow jump 1,207 points to finish at 50,116 a gain of 2.5% since last Fridays close. The NASDAQ surged 491 points today to end the week down 431 points or 1.84%, while the S&P 500 gained 134 points today to exit the week fractionally lower. Quite the volatile turn of events.
The Sky Is Falling
Or so says the legacy media at every opportunity. Unfortunately, corporate America didn’t get the memo as earnings continue to surge and outperform the estimates. The latest data from FactSet Research shows that positive earnings surprises have pushed the aggregate 4th quarter earnings growth rate to an impressive 12.1% as the S&P 500 companies close in on a 5th consecutive quarter of double digit earnings growth. Thanks to FactSet for the chart.
The Debasement Trade
Earlier in the week stocks struggled, particularly the AI and Software crowd as profitability and earnings were questioned once again. The metals also fumbled their recovery after last Friday’s beating leaving Silver largely unchanged while Gold managed to recover about half of its recent losses. Bitcoin continues to reel, still down some 10% from its recent highs, despite today’s big comeback. The trend is your friend, until it isn’t. This led to no shortage of finger pointing of course. The legacy media was quick to accuse President Trump’s Fed Chairman nominee Kevin Warsh as the cause of the recent market turmoil. Or perhaps it was the long rumored end to QE or Quantitative Easing as neither Treasury Secretary Scott Bessent nor Kevin Warsh are fans of a bloated Fed Balance Sheet. That has fallen 2.4 trillion since 2022 to 6.5 trillion as of the end of 2025.
The Dollar is Sinking
Another Red Herring floated by the mainstream media recently to terrify the public and convince them that the markets and economy are going to tank any minute. Like all their “Sky is Falling” claims last year. This too is going to be proven just more hot air, long on opinion and short on facts. As the Dollar Index chart from the Federal Reserve Economic Database or FRED shows below. I added the red circle for clarity. It closed higher for the week. Even a 5-year old can look at the graph and see that there is little to tell. Just basic up and down fluctuation as one would expect.
The economic data came in mixed this week, nothing particularly significant one way or the other. Next week retail sales come out Tuesday. The January BLS employment report will be out on Wednesday, with expectations for 70,000 new jobs, while the unemployment rate remains unchanged at 4.4%. Another anemic set of expectations to be sure, employment growth should pick up as the year progresses.
Have a great weekend everyone! See you next Friday.
Last Week’s Post: Show Me The Money
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