Weekly Market Report

Major Indices - Weekly Performance S&P 500: 6878.88 -0.44% (weekly) Dow Jones: 48977.92 -1.31% (weekly) Nasdaq: 22668.21 -0.95% (weekly) Russell 2000: 2632.36 -1.18% (weekly) VIX: 19.86 +4.03% (weekly) Earnings Season Insights Tech Sector Highlights: Monitor major tech earnings for guidance on AI spending, cloud growth, and margin trends Semiconductor companies reporting on chip demand and inventory levels Software/SaaS companies highlighting subscription growth and retention metrics Consumer Discretionary Sector Challenges: Retail earnings showing pressure from inflation and changing consumer spending patterns E-commerce growth rates and margin compression themes Automotive sector reporting on EV transition progress and supply chain normalization

Federal Reserve Interest Rate Decision

FOMC Meeting - January 28, 2026: Labor market showing signs of stabilizing; future rate hikes are NOT the base case Tariff inflation expected to peak "in the middle quarters of 2026" Economic growth expected to accelerate in H1 2026 Next FOMC meeting: March 18-19, 2026 (likely to hold rates again) Powell's term ends May 2026; Kevin Warsh nominated as next Fed Chair Inflation Data Release December 2025 CPI (Released January 13, 2026):

Headline CPI: +2.7% year-over-year (unchanged from November), +0.3% month-over-month Core CPI (ex-food & energy): +2.6% YoY, +0.2% MoM Shelter costs elevated at ~4.6% YoY (owner's equivalent rent) PCE inflation (Fed's preferred measure): ~2.8% YoY in recent months still above 2% target Upcoming: January 2026 CPI release on February 11-13, 2026 at 8:30 AM ET Market expecting potential tick up to 2.9% YoY due to tariff concerns PPI and wage growth data showing persistence in inflation pressures Geopolitical Events Geopolitical tensions continue to impact markets:

Millions may drop ACA coverage amid premium spikes, and experts warn this could raise costs for others. Iran conflict risks Strait of Hormuz standstill and sparks talk of $100-a-barrel oil As investors wait for crude-oil trading to reopen amid Iran conflict, shares of the world’s biggest producer are climbing

Sectors gaining traction:

Utilities (XLU): +3.02% - Strong relative performance this week Consumer Staples (XLP): +2.41% - Strong relative performance this week Health Care (XLV): +2.16% - Defensive rotation and biotech catalysts Sectors facing headwinds: Consumer Discretionary (XLY): -0.50% - Spending concerns weighing on discretionary names Information Technology (XLK): -1.50% - Relative weakness vs broader market Financials (XLF): -2.02% - Relative weakness vs broader market

Recent SPAC IPOs (Late January - Early February 2026):

• Hennessy Capital Investment Corp. VIII (HCICU): $241.5M (upsized), Feb 5, Nasdaq - industrial tech/energy transition
• Colombier Acquisition Corp. III (CLBR.U): $260M, Feb 3, NYSE - board includes Donald Trump Jr.
• Iris Acquisition Corp. II (IRAB.U): $150M, Feb 2, NYSE
• White Pearl Acquisition Corp. (WPAC.U): $100M, Jan 30, NYSE - FinTech/InfoTech focus
• M Evo Global Acquisition Corp. II (MEVOU): $270M (upsized), Jan 29, NYSE
• KRAKacquisition Corp. (KRAQ): $300M (upsized from $250M), Jan 27, Nasdaq - digital asset economy (Kraken/Tribe Capital)
• Space Asset Acquisition Corp. (SAAQ): $200M, Jan 27, Nasdaq - "Space 2.0" focus
• Helix Acquisition Corp. III: $150M (upsized from $125M), Jan 23, Nasdaq - healthcare/biotech (stock-only, no warrants)

SPAC Market: 24 SPAC IPOs raised $5.619 billion in January 2026 (highest monthly total since February 2022)

Notable De-SPAC Activity: Kodiak Robotics (~$2.5B valuation), Veraxa Biotech ($1.3B), Terra Innovatum ($475M - nuclear), Terrestrial Energy ($925M - nuclear), Xanadu ($3.6B - quantum computing)

Cryptocurrency Movements

Bitcoin: $66,897.39 +4.40% (weekly) Ethereum: $2,007.90 +8.36% (weekly) Institutional adoption trends and ETF flows Regulatory developments in crypto markets Correlation with risk assets and tech stocks

Economic Indicators

Unemployment Claims:

Initial claims: Stable in low-200k range showing labor market resilience Continuing claims: Showing labor market health with no significant deterioration Trend: Labor market stabilizing per Fed assessment

Retail Sales:

December retail sales showed consumer resilience despite inflation pressures Ex-auto and gas: Core spending holding up Trend: Real spending power being tested by persistent inflation; upcoming January data will be key indicator Technical Analysis S&P 500 (6878.88, -0.44%):

• Consolidating just below 7,000 psychological level after reaching highs near 7,000 in December
• Support levels: 6,850-6,900 (immediate), 6,750-6,800 (strong), 6,650 (50-day MA, critical)
• Resistance: 7,000 (psychological), 7,050-7,100 (next target)
• RSI: 48 (neutral with slight bearish lean); MACD showing neutral/slight bearish divergence
• 50-day MA: ~6,650 (currently above); 200-day MA: ~6,400 (strong long-term support)

Nasdaq (22668.21, -0.95%):

• Corrective pullback from highs near 24,000; broke below 50-day MA (~22,350) - bearish signal
• Potential double-top formation at 23,500-24,000 level
• Support: 22,800-23,000 (immediate), 22,200-22,400 (50-day MA), 21,500 (200-day MA critical)
• RSI: 38 (approaching oversold); MACD: bearish crossover confirmed
• Volume: Above average on down days indicating institutional distribution

Market Breadth:

• Advance/Decline line deteriorating; fewer stocks participating in rallies (narrowing leadership)
• New Highs vs New Lows ratio contracting - warning sign of weakening internals
• Distribution days increasing with selling on higher volume

Sector Technical Signals:

• Strong relative strength: Consumer Staples (bullish breakout), Industrials (trending higher), Materials (base building)
• Weak relative strength: Technology (broken support), Communication Services (downtrend), Consumer Discretionary (rolling over)
• Key patterns: Tech (XLK) potential head-and-shoulders at $225; Nasdaq testing 50-day MA support
• Trading range: Consolidation continues with choppy action and sector rotation persisting

Top Market News This Week

1. Better Industrial Stock: Ford vs. Ferrari
2. Life360, Inc. (LIF): A Bull Case Theory
3. Raymond James Cuts Brown and Brown (BRO) Target by $8
4. William Blair Reiterates Buy on Erie Indemnity (ERIE)