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Weekly NewsletterJanuary 15, 2025

This Week on Wall Street – Week of January 13th

Stocks and bonds continued their decline as the week kicked off, following Friday’s surprising blowout jobs report.

This Week on Wall Street – Week of January 13th

Market Commentary

Stocks and bonds continued their decline as the week kicked off, following Friday’s surprising blowout jobs report. 

Investors are recalibrating their expectations, with markets now pricing in less than 30 basis points of Fed rate cuts for all of 2025. This shift has pushed the 10-year Treasury yield to a 14-month high, while the 30-year yield hovers just below the significant 5% threshold. Stabilizing yields will be crucial before equity markets can regain any meaningful momentum. 

On the commodities front, oil prices surged to a five-month high after the U.S. announced its most aggressive sanctions yet on Russia’s oil trade. These measures are expected to reduce the global crude surplus, adding upward pressure on prices. The International Energy Agency had predicted a surplus of 1 million barrels per day this year. 

This week promises more market volatility as economic data drives investor sentiment about the Fed’s next moves. All eyes will be on Wednesday’s Consumer Price Index (CPI) report, which offers an update on inflation. While inflation has eased from its peak, it remains well above the Fed’s target and is ticking higher. Expectations call for a 2.9% year-over-year rise, up from 2.7% last month. We also will get a better read on the consumer and the economy with retail sales on Thursday. Analysts expect a slight uptick to 0.4% year-over-year from 0.7% last month. 

The S&P 500 gave up its year-to-date gains last week and has opened around the crucial 5,790 support level. This is an important psychological level that could attract buyers. Turning to our Newton Model, the softening across styles and sectors continued. Last week, Energy emerged as the strongest-performing sector, followed closely by Communications and that trend continued this week. Interest rate-sensitive sectors like Real Estate and Utilities lagged. In fixed income, we still see relative strength at the front end of the curve and away from interest rate sensitivity.

Economic Releases This Week

Monday: Monthly U.S Federal Budget

Tuesday: NFIB Optimism Index, Producer Price Index, Kansas City Fed President Speaks, Fed Beige Book

Wednesday: Consumer Price Index, Empire State Manufacturing Survey, Richmond/New York/Chicago Fed President’s Speak

Thursday: Initial Jobless Claims, U.S. Retail Sales, Home Builder Confidence Index

Friday: Housing Starts, Industrial Production, Capacity Utilization

Stories to Start the Week

Santa Ana winds are expected to persist over the next three days across Los Angeles and Ventura counties. The death toll rose to 24. 

January 19th deadline looms for a TikTok sale or else face a U.S. ban.

Office vacancies hit a new high last year, with 20% of office space in the country’s top 50 metro areas empty. 

Bill Ackman’s Pershing Square is forming a new entity. to merge with real estate developer Howard Hughes Holdings

 

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What is Newton?

Our Newton model attempts to determine the highest probability of future price direction by using advanced algorithmic and high-order mathematical techniques on the current market environment to identify trends in underlying security prices. The Newton model scores securities over multiple time periods on a scale of 0-20 with 0 being the worst and 20 being the best possible score.

Trend & level both matter. For example, a name that moves from an 18 to a 16 would signal a strong level yet slight exhaustion in the trend.

 

Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry and sector performance.

About This Series

Last Week on Wall Street

Last Week on Wall Street is Waterloo Capital's weekly market recap, published every Monday morning to keep advisors and clients informed on the most significant developments from the prior trading week. Each edition synthesizes equity market performance, fixed income moves, macroeconomic data releases, and notable corporate earnings into a concise, actionable read — cutting through the noise so our readers can focus on what actually matters for long-term wealth management.

Our research team tracks the S&P 500, Dow Jones Industrial Average, NASDAQ Composite, and 10-year Treasury yield as primary benchmarks, while also covering sector rotations, commodity swings, and policy shifts from the Federal Reserve and Washington. When major cross-asset moves occur — such as the historic gold selloff covered in this edition — we dig into the mechanics and the likely ripple effects on diversified portfolios, helping clients contextualize volatility without reacting impulsively.

Our Research Approach

Evidence-Based Perspective for Long-Term Investors

Waterloo Capital's investment research is grounded in fundamental analysis and long-term thinking. We believe that disciplined, evidence-based investing — anchored in each client's specific goals, risk tolerance, and time horizon — consistently outperforms reactive decision-making driven by short-term headlines. Our weekly commentary is designed to inform, not alarm: we put market moves in their proper historical context so that clients can hold conviction in their financial plans through periods of uncertainty.

As an SEC-registered investment advisor headquartered in Austin, Texas, with offices across the Southwest and Southeast, Waterloo Capital serves high-net-worth individuals, families, and institutions. Our advisors use proprietary research like this weekly recap as one input among many — alongside in-depth portfolio reviews, tax planning, and estate strategy — to deliver comprehensive wealth management tailored to each client relationship. To learn more about how our investment philosophy and ongoing market research can serve your financial future, contact our team directly.

Investment Disclosure: The information contained in this article is provided for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal. Waterloo Capital, LP is an SEC-registered investment advisor. Registration does not imply a certain level of skill or training. Please consult with a qualified financial professional before making any investment decisions.

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