• So far in the first trading days of the year, markets have gotten off to a strong start — U.S. stocks are up, international stocks are up, large caps are up, and small caps are moving higher as well.

• We looked back historically to see what it means when the first five trading days of the year are positive.

• Going back to about 1950, when the first five trading days are up, the likelihood that the market finishes the year higher is well over 80%.

• This year we’re not just slightly positive — we’re up around 1% already — which strengthens that historical signal.

• On top of that, the last several years have been double-digit years, and historically that actually reinforces, rather than weakens, the outlook when the year starts strong.

• While past performance never guarantees the future, it’s meaningful supporting evidence.

• One of the big questions for 2026 is whether we’re finally seeing a rotation in the market.

• For the first time in years, small-cap stocks are outperforming large caps early in the year.

• Historically, small caps eventually outpace large caps over long periods, but that hasn’t happened for more than a decade — so this is notable.

• We’re also watching to see whether value stocks, cyclicals, financials, energy, defense, and industrials start to catch up with growth.

• Even within large caps, there are signs money may be rotating away from last year’s leaders and into other areas.

• Another interesting development is that international stocks outperformed U.S. stocks last year, and that trend has continued early in 2026.

• It’s too early to say what will persist, but the early signs suggest leadership may be broadening.

• We’ll continue tracking these rotations week by week and updating you as the picture becomes clearer.

• Jobs data came out today and, for the first time in a while, it wasn’t clouded by shutdown-related distortions.

• New job creation came in slightly below estimates, which raises the question of whether the data is weak enough to influence the Fed.

• The Fed meets later this month, and the consensus right now is that rates will likely remain on pause after last year’s cuts.

• The big question is whether jobs data cracks enough to push the Fed toward additional rate cuts sooner rather than later.

• So far, we’re not seeing widespread layoffs, but we’re also not seeing strong job creation — a fragile balance.

• A lot of this hesitation appears tied to geopolitical uncertainty and a broader “wait-and-see” environment.

• Interestingly, despite weaker jobs data, parts of the yield curve actually moved higher today, showing the bond market is still sorting this out.

• Another major issue we’re watching closely is the Supreme Court case around tariffs imposed last April.

• The legal authority used to enact those tariffs is being challenged, and the Supreme Court could overturn them.

• If that happens, tariffs could be unwound, raising questions about federal revenue, deficits, and market volatility.

• On the stock side, much of this risk appears to be priced in already, and tariff relief could even be a short-term tailwind.

• On the bond side, unwinding tariffs could increase deficit concerns and lead to some volatility in yields.

• We expect some volatility around the decision, but nothing we’re trying to actively position around.

• We also heard President Trump encourage buying mortgage bonds to help bring mortgage rates down.

• Housing affordability remains a major issue, driven by limited supply and higher rates keeping both buyers and sellers on the sidelines.

• Mortgage rates dipped slightly on the news, but long-term relief will likely require lower 10-year Treasury yields and more housing supply.

• Buying mortgage bonds may help at the margin, but it doesn’t solve the structural supply-demand imbalance in housing.

• Government intervention in bond markets isn’t new, but it’s something we’ll be watching closely given past experiences.

Transcript:

Jordan Roach
Hello everybody. Thank you for joining us for this week’s Weekly Market Alert video. Today is Friday, January 9, back in studio for the first one of 2026 thanks for being with us today. A lot to get through. We’re going to talk about the market action we’ve seen through the first five or six trading days. And could it give us anything about what we should expect going forward? We’re going to talk about is a rotation finally underway, and all the themes and all the elements that we’ve seen in the last 10 years, we finally start seeing a move away from what has worked, or maybe what could work. We’re going to talk about jobs data. We’re going to talk about buying mortgage bonds, and of course, we’re going to talk about our tariffs that have been in place since April. Are those going to be overturned by the Supreme Court? So a lot to get through, and let’s jump right into it. So so far, through the first five or six trading days, broadly, we’ve seen all sorts of markets up. We’ve seen US stocks up, we’ve seen international up, we’ve seen big US stocks up. We’ve seen small cap stocks moving up. And so one thing we’ve done is to look and say, okay, through the first 456, days of trading activity. If those days are positive, and this is we’re going back to about 1950 what does it tell us about what to expect going forward? And it’s some really interesting stats. And basically what we’ve seen is, if you have the first five trading days, if you’re positive, and we’ve been more than positive, we’re about up 1% but over positive, the likelihood that we’re up through the end of the year is very, very strong. Okay, we’re talking well over even 80% so it’s a really interesting stat to say only five trading days could give us an idea of what could expect. Now, of course, this doesn’t always play out right. What happens to the past is not guaranteed the future, but it’s interesting to think that the first five days, and we see a lot of demand. We’ve seen up markets more often than not. That means the rest of the year is very good. And then the other thing I wanted to look at is, if we have really good years in the prior years, could there give us a different signal, or is it confirm it even stronger? And what we found is, if you have very strong preceding years, we’re talking double digit years, like we’ve seen because 2023 because 2023 24 and five have been double digit years, that gives us even a stronger signal that good things are likely to come again if you see strong action in the first five trading days. So really interesting stat that, in itself, does not just make us bullish, but it is good supporting evidence to say we’ve seen some good activity so far that should hopefully continue throughout the rest of the year. So really, really interesting stat there. The other thing is, are we going to start seeing a rotation out of these, AI theme stock, these mag seven stocks, right the dominant area of the market that’s really led over the last three years? Think Nvidia and all these semiconductors, even Google and all these are we finally going to see other areas catch up or surpass them in their market leadership for this year. So far, what we’ve seen is small caps finally beating large caps, and again, historically, if you go over 20 or 30 years, small caps tend to eventually outpace large caps, but we have not seen that in the last 10 to 15 years, and this year, despite a lot of fog, a lot of pessimism from economic activity, from geopolitical risk for what the Fed’s going to do, and jobs data, small caps right now are picking up steam. So I’d love to see that continue. You know, mid cap size as well. We’d love to see that catch up to the party. But that could be interesting to see again. Are we starting to see a rotation out of the large cap into the small cap, and even in the large cap space. Are we finally going to see value stocks catch up with growth? Cyclicals catch up with growth? I think financial, think defense industrials, energy stocks. Are we going to start seeing maybe service companies, internet companies, hardware companies, catch up to the semiconductors. So it’s a very interesting to see what is working to start the year, of course, doesn’t mean it’s going to keep working, but we are seeing a little bit of a rotation out of the things, out of the leaders from last year. And that also includes, for the first time we’ve seen in years, is international stocks beat us last year. And so far, to start this year, we’re seeing that theme continue. So more to come on that we’ll be tracking that week after week, giving you updates, but very interesting to see that the next thing we want to look at is the jobs data that came out today. And why that’s important is because we have had jobs data back in December and November, but it was kind of clouded and didn’t have the full range of data because of the shutdown. And so today we got it out. We found that jobs growth new jobs was relatively weak, right below estimates. Now the question is going to be is, is the jobs data new jobs weak enough to say to the Fed, we need to continue to lower rates this month, because later this month, the Fed does meet, decide what they want to do on rates and largely the weight of the evidence. The pollsters right now think that they’re going to probably keep rates where they are right. We had three cuts to the end of the year. We think largely that we’re probably right now going to pause. But is the jobs data right? Cracking enough, weak enough to maybe give the Fed something to look at to say, You know what, we need to go. Ahead and continue to pull rates down. Otherwise, consensus right now is we might be in a paused environment, rate environment, until the summer. So more to come on that, of course, and again, you know, what we think is the market is probably ready to see some sort of, you know, rates to come down now, I think today, despite weak jobs data, you actually saw some part of the yield curve early on, steepen, meaning rates actually pushed up despite jobs data being weak and thinking that it could be supportive of the Fed, pulling rates down. So obviously, the bond market is jostling with this, maybe even expected it to some point, and we’ll see where this comes. But again, I think next, this year, really, and it’s weird to say that we’re already in 2026 I think it’s what we’re gonna see, this balance between new job creation and layoffs. And what we’re not really seeing is a ton of layoffs now. We’re also not seeing a lot of new jobs created, right? We’re kind of in this fragile state, and I think a large degree that’s because of the geopolitical environment we’re in, the economic environment we’re in. There’s a lot of just wait and see. So again, we’ll continue to monitor that we’ll see if later this month, if there’s enough data for the Fed to go ahead and pull rates down. Now, a big decision that we’re waiting on this morning, quite in fact, as we shoot, is what’s going to happen is, as you know, the legality that kind of the action the Trump administration relied upon to to to enact tariffs, because largely that’s given to Congress. That’s a congressional power is an Emergency Economic act that was came in from the 70s. That’s what they leaned upon as the give them legal authority to enact all these tariffs back in April. And so that’s been challenged, gone all the way to Supreme Court, and right now, actually, the betting odds are that that could be overturned, right? So think about the tariffs being in place that actually the economic powers that the Trump administration used to justify it, the Supreme Court could say, no using that act you do actually do not have the power to levy those tariffs, so they’d be unwound. Now the question is going to be, is that going to be a big problem

for our federal deficit. How do we get the money back? What’s the timing on that? Is that going to cause stocks to pull down, bonds to have volatility? And I think largely, what we think is the market is probably, at least, on the stock side, is priced some of this in in fact, if some of this revenue is returned to stocks, maybe it is in a short term tailwind for stocks, quite frankly, because again, some of those tariffs and how they’re imposed could allow dollars revenue to come back and flow into companies on the bond side, I would expect this could cost some volatility, okay, because again, now the deficit would raise. You know, borrowing requirements would probably raise. Yields could raise because of this, as the bond market starts pricing in their ability to again, to shrink the deficit. So big decision today, I don’t think it’s a it’s a short term or even really, necessarily a long term structural problem, something to think about, something to talk about. But what we expect as large the market knows this is coming, and we’ll probably see an uptick in volatility, but nothing that we’re going to try to position around. And then last thing that we’re hearing, and there are more we could talk about, but yesterday, really, we saw President Trump talking about Fannie and Freddie Mac, Fannie Mae and Freddie Mac saying, we urge you to go ahead and go out to the market and buy mortgage bonds. Right? A big problem right now that we have in the economy is, you know, housing prices are kind of locked up. New buyers can’t get in, and that’s because two things, one, there’s not a lot of supply coming in. And two, rates have been so high, a lot of buyers are just sitting tight. And that’s a big problem, because, again, for a lot of Americans, one of their biggest assets is their house, right? That we we kind of a lot of times look at ourselves and how well we are off financially based on our ability to own homes, move up with bigger homes, and that’s been a huge problem, really, for the last three years. So right now, President Trump’s thinking is, okay, we’re gonna start buying mortgage bonds. Hopefully that pulls rates down, right that can help with some of this affordability issue. Now whether that helps or not, we don’t know that. We have seen mortgage rates on that news come down a little bit, because none of this has happened yet. I think Fannie Mae and Freddie Mac both said we can start buying bonds pretty quickly. They have the cash to do so. There’s liquidity out there. They can do it. We did see mortgage rates, on average, come down a little bit, but what we really need to see is the 10 year treasury curve. We needed to see those rates coming down, because that’s really what we’re pegged to. And so yes, buying mortgage bonds probably can help. Can help the psychology of it. Can be an influential force. But we need to see 10 year treasuries come down. We need to see kind of the supply side economics, right? We need to see supply out there for demand to be matched. And we don’t have that right now. We have more buyers than we have sellers right now, and that’s a problem. And so this probably doesn’t fix it. Maybe it’s a start. Maybe it’s not. It’s really interesting. Again, you know, there’s a lot of things that give me pause about the government going to buy its own bonds. That always happens. Last time we saw really, you know, any sort of intervention buying our own bonds was heavily, was back post covid. So there’d be this different reason to. Do it. I don’t know the effect of it, but it’s certainly something we’ll watch and then something more to come. Probably we’ll talk on more next week that I’ve been doing a lot of research on, is obviously the situation with Maduro being captured, arrested, removed from power in Venezuela, and the big effects that could have on the oil market, on the commodity market going forward. So I think we’ll probably have another episode alone on that next week. So really interesting start to the week. A lot more to come. We’d love watching it for you guys. Hope it brings you peace of mind. Please stay tuned, like and subscribe and we’ll talk to you again next week. Thanks, everybody.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023