Weekly Update: New Administration Takes Office

Jack Brown, CFA & Casey Farrow

January 29, 2025

Weekly Market Update
January 28, 2025

Outlook

The period following covid stimulus saw a pickup in consumer demand - and with it, an increase in the corporate borrowing and lending cycle as businesses sought to keep up with demand. Borrowing growth peaked towards the end of 2022 and subsequently retreated in 2023, right around the time when inflation-related recession fears gathered steam.1

However, the 2023 contraction in borrowing bottomed in the spring of 2024, and have begun to rise modestly again.2 Recessions typically haven't started (same chart) when corporate borrowing activity turns up. This is a good sign in our view. Further, in November, the Small Business Optimism Index accelerated significantly.3 Taken together, we expect to see business activity continue to grow in 2025 - a good sign for the economy.

While the economic calendar was lackluster, the political calendar was action-packed in the prior week. U.S. President Doanld Trump’s inauguration was no doubt the event of the week. President Trump signed in a slew of executive actions, many of which will result in major policy changes. He refrained from announcing tariffs on other countries but reiterated his “make in America or face tariffs” message later in the week at the World Economic Forum.

Trump disclosed information about the Stargate Project, a proposed $500B, four-year initiative to build out artificial intelligence infrastructure and data centers in the U.S. This news sparked a rise in semiconductor-related companies and the broader technology sector.

The continuation of corporate earnings season also sparked moves in the market, including a report from streaming giant Netflix (NFLX) which showed a higher-than-expected jump in paid memberships.

In the meantime, the focus shifts to monetary policy with the Federal Reserve’s first meeting of the year taking place on Tuesday and Wednesday. Later in the week, markets will receive updates on GDP (Gross Domestic Product) growth and the status of inflation on Friday with the release of PCE (Personal consumption Expenditures).

For the week, the S&P 500 and Dow Jones Industrial increased by 1.7% and 2.2%, while the tech-heavy Nasdaq Composite and Russell 2000 advanced 1.7% and 1.4%.

[1] https://www.cnn.com/2023/06/05/economy/recession-chances/index.html

[2] https://fred.stlouisfed.org/graph/?g=1DdcL

[3] http://www.nfib-sbet.org/

Upcoming Reports

Monday: Building Permits, New Home Sales

Tuesday: Durable Goods Orders, CB Consumer Confidence

Wednesday: FOMC Statement and Press Conference, Fed Interest Rate Decision

Thursday: Gross Domestic Product (GDP), Pending Home Sales

Friday: Personal Consumption Expenditures (PCE)

Market Performance Stats

Aviance Capital Partners is a Naples, FL-based registered investment advisor providing professional wealth management, financial planning, and investment strategies since 2009. Our financial advisors are fiduciaries, offering services such as retirement income planning, tax-efficient investing, and customized portfolio management, all designed to help clients achieve their long-term financial goals.

Whether you're preparing for retirement or seeking a tailored investment management strategy, Aviance’s wealth advisors in Naples and wealth advisors in Orlando provide financial planning and investment management services to investors in all of Florida and beyond.

Thank you for reading. If you have any questions or concerns, or would like to speak with a member of our team, please click the button below to reach out to us. We would love to hear from you!

Disclosures: Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a tax strategy, investment strategy, and financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. This should not be construed as specific investment, financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. The index and sector performance data appearing or referenced above has been compiled by the respective copyright holders, trademark holders, or publication/distribution right owners. Historical performance results for investment indexes or sectors represented are for illustrative purposes only and do not represent actual portfolio performance. The indexes or sectors represented generally do not reflect the deduction of transaction and custodial charges, or the deduction of an investment-management fee, which would decrease historical performance results. Investors cannot invest directly in an index. ACP makes no warranty, express or implied, for any decision taken by any party in reliance upon such index information.

The S&P 500 is the Standard & Poor’s index calculated on a total return basis. Widely regarded as the benchmark gauge of the U.S. equities market, this index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the large-cap segment of the market, with over 80% coverage of U.S. equities, it also serves as a proxy for the total market. The Dow Jones is a price-weighted market index that tracks 30 large, blue-chip companies. The NASDAQ is the second-largest stock and securities exchange and attracts more technology-focused or growth-oriented companies. The Russell 2000 Index is a small-cap stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. The Russell 1000 Index is a subset of the larger Russell 3000 Index and represents the 1,000 top companies by market capitalization. Bond Aggregate is represented by the iShares Core U.S. Aggregate Bond ETF.

All “expectations, forecasts, consensus, or estimates” are based on Bloomberg unless otherwise specified.

Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597. For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.

This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm.