To Summarize: Market leadership widens beyond mega-cap as rate-sensitive and cyclical areas improve. Price pressures continue easing, giving the Federal Reserve (Fed) room to shift towards easier policy over time. Factory indicators are firming, while companies keep spending on equipment, upgrades, and long-cycle buildouts.
The big takeaway – Market growth is becoming more widespread, with leadership shifting to diverse sectors and regions beyond mega-cap stocks.
In the Markets: Market leadership is broadening as rate-sensitive and cyclical sectors outperform, with smaller and international companies generating stronger returns. Equity gains have expanded beyond mega-caps, led by the S&P 500 equal-weight, small caps, and emerging markets. Bonds are up due to rate cut expectations, while commodities show mixed results and Bitcoin has dropped. Rising earnings estimates, especially internationally, continue to drive positive momentum across markets.
Inflation Eases Amid Policy Shifts: Inflation has cooled since last summer, with real-time measures now below the Fed’s target. This provides policymakers with greater flexibility to ease monetary policy. The bond market remains focused on inflation progress as Fed leadership remains uncertain. Recent trends show both goods and services prices decelerating, giving the Fed potential room to cut rates as price pressures continue to ease.
Momentum Grows in Manufacturing: The manufacturing industry is showing early signs of improvement, with factory indicators firming and companies ramping up investments in productivity and infrastructure. New orders are outpacing inventories, hinting at stabilizing demand and faster growth. Capital spending on technology and core equipment continues to rise, with tech capex projected to reach $650 billion in 2026.
Top Headlines: We’re reading about how Accenture is linking leadership promotions to regular use of its AI tools, China’s humanoid robots are far more advanced than a year ago, apartment occupancy finally stabilizes after six consecutive months of mild decline, and the U.S. Supreme Court ruling on tariffs requires the administration to shift to Plan B.
Related resources:
- AI: Accenture tells senior staff to use AI tools or risk losing out on leadership promotions
- Robotics: China’s humanoid robots go from viral stumbles to kung fu flips in one year
- Commercial Real Estate: U.S. Apartment Occupancy Stabilizes as Rent Cuts Ease in January
- U.S. Supreme Court & Tariffs: The shift to Plan B
Disclosures
Investment advisory services are offered by Aprio Wealth Management, LLC, a Securities and Exchange Commission Registered Investment Advisor. Opinions expressed are as of the publication date and subject to change without notice. Aprio Wealth Management, LLC shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses or opinions contained herein or their use, which do not constitute investment advice, are provided as of the date written, are provided solely for informational purposes and therefore are not an offer to buy or sell a security. This commentary is for informational purposes only and has not been tailored to suit any individual. References to specific securities or investment options should not be considered an offer to purchase or sell that specific investment.
This commentary contains certain forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially and/or substantially from any future results, performance or achievements expressed or implied by those projected in the forward-looking statements for any reason. No graph, chart, or formula in this presentation can be used in and of itself to determine which securities to buy or sell, when to buy or sell securities, whether to invest using this investment strategy, or whether to engage Aprio Wealth Management, LLC’s investment advisory services.
Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Any securities mentioned in this commentary are not FDIC-insured, may lose value, and are not guaranteed by a bank or other financial institution. Before making any investment decision, investors should read and consider all the relevant investment product information. Investors should seriously consider if the investment is suitable for them by referencing their own financial position, investment objectives, and risk profile before making any investment decision. There can be no assurance that any financial strategy will be successful.
Certain investor qualifications may apply. Definitions for Qualified Purchaser, Qualified Client and Accredited Investor can be found from multiple sources online or in the SEC’s glossary found here https://www.sec.gov/education/glossary/jargon-z#Q