The Profit Margin: January 5, 2026
Statistic of the Week
While only 37% of Americans age 25 and older with incomes under $100,000 planned to make New Year’s resolutions, 97% of those who did, included at least one financial goal. Saving more money ranked as the top resolution, followed by spending less and reducing expenses. Rounding out the top three was a focus on improving credit scores. Ask your Wealth Advisor for help in creating your 2026 goals.
Global Perspective
On January 1, Bulgaria became the 21st country to join the eurozone, bringing the number of people using the euro to more than 350 million. Public opinion polls show the population was relatively evenly split on adopting the currency, while the business community was largely supportive. Bulgaria joined the currency union ahead of more economically advanced candidates such as the Czech Republic, Hungary, and Poland.
Market Moving Events
Wednesday: ISM Services, JOLTS, Factory Orders, ADP Employment
Thursday: Jobless Claims, Trade Deficit, Consumer Credit
Friday: Nonfarm Payrolls, Housing Starts, Consumer Sentiment
Commentary
As a new year begins, market prognosticators are once again offering predictions for 2026. Two indicators that tend to receive the most attention are the “January Barometer” and the Presidential Election Cycle. The January Barometer suggests that market performance in January often sets the tone for the rest of the year. Since 1928, when the S&P 500 has posted a positive return in January, the market has gone on to deliver a positive full-year return approximately 79% of the time, with an average annual gain of 9.5%.1 The Presidential Election Cycle tells a more cautious story. Historically, the second year of a presidential term has been the weakest for equity markets. From 1928 through 2015, the S&P 500 posted an average return of just 3.3% during the second year of an administration and finished positive only 54.2% of the time, compared with a 67% positive rate across all years in that period.2 While these gauges are worth noting, as your money managers and financial planners, our focus remains on navigating the market environment as it unfolds rather than relying on historical patterns alone.
In the year’s first full trading week, there is a full slate of economic data. The ISM Manufacturing and Services indices are both scheduled for release; analysts expect continued softness in manufacturing.3 The most important report of the week will be the labor report. Economists expect the economy to have added 54,000 jobs in December, with the unemployment rate edging higher from 4.6% to 4.7%.4 While market participants are hopeful that softer labor data could lead to additional rate cuts, excessive weakness could raise concerns about economic growth.
Chart of the Week
The S&P 500 has posted earnings growth of 13.0% over the past 12 months. Looking ahead, most analysts are forecasting double-digit earnings growth in 2026.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
LSEG, Reuter’s
Statistic of the Week:
Wells Fargo
Global Perspective:
Reuter’s, BBC
Commentary:
1. MarketWatch.com
2. BMO
3. MarketWatch.com
4. MarketWatch.com