January market review

January market review

The month’s market headlines were
dominated by a surge in gold prices, a weaker US dollar and stock markets that
largely shrugged off ongoing geopolitical tensions. Despite pockets of
volatility, the Dow Jones Industrial Average is now approaching the 50,000 mark
and all major US equity indices finished January higher, with the S&P 500
up 1.4%, the Nasdaq up 1.0% and the Dow up 1.7%.

“Markets have largely looked past the geopolitical noise, with
international equities outperforming the US in January and US markets
continuing to set new highs,” Raymond James Chief Investment Officer Larry Adam
said.

The US economy continued to show resilience, even as uncertainty
around tariffs and trade policy weighed on global sentiment. As expected, the
Federal Reserve (Fed) kept interest rates unchanged at its January 28 meeting,
opting to wait for clearer signs that inflation is steadily moving lower.

The US dollar weakened, touching a four-year low, as investor
sentiment turned more cautious, though interest‑rate differentials still
technically favor the dollar.

In the
Treasury market, longer‑term yields rose more than short‑term yields, causing
the yield curve to steepen. A similar dynamic played out in the municipal bond
market; corporate bonds also benefited from a supportive backdrop with credit
spreads narrowing to their lowest levels in about a year for both high‑quality
and high‑yield issuers.

Job growth remained positive but subdued and inflation held
steady, but sentiment surveys showed Americans are feeling strained by prices
and job market concerns.

The bottom line

The
year has started off busy, with shifts in market leadership and geopolitical
tension in the headlines. Still, the overall environment remains generally
supportive. For long-term investors, keeping attention on the bigger picture
rather than noise is as important as ever.

Investing involves risk, and
investors may incur a profit or a loss. All expressions of opinion reflect the
judgment of the Raymond James Chief Investment Officer and are subject to
change. There is no assurance the trends mentioned will continue or that the
forecasts discussed will be realized. Past performance may not be indicative of
future results. Economic and market conditions are subject to change.
Diversification does not guarantee a profit nor protect against loss.

Pendle Hill Advisors is proud to contribute to the Montgomery
County News with our weekly curated financial news and topics. If you have any
questions about the markets, your financial plan, or anything, please feel free
to reach out to our office for a no cost initial consultation.

Kent Pendleton, AAMS®

Financial Advisor, RJFS

Pendle Hill Advisors LLC

14375 Liberty St, Ste 109 |
Montgomery, TX 77356

T 936-297-8267

Kent.Pendleton@raymondjames.com
| www.raymondjames.com/pendlehilladvisors

Material created by Raymond James for use by its advisors.
Securities offered through Raymond James Financial Services, Inc. Member
FINRA/SIPC. Investment advisory services are offered through Raymond James
Financial Services Advisors, Inc. Pendle Hill Advisors is not registered broker
dealers and is independent of Raymond James Financial Services.

The Dow Jones Industrial Average
is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is
an unmanaged index of all common stocks listed on the NASDAQ National Stock
Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The
MSCI EAFE (Europe, Australasia and Far East) index is an unmanaged index that
is generally considered representative of the international stock market. The
Russell 2000 is an unmanaged index of small-cap securities. The Bloomberg
Barclays US Aggregate Bond Index is a broad-based flagship benchmark that
measures the investment grade, US dollar-denominated, fixed-rate taxable bond
market. An investment cannot be made in these indexes. The performance
mentioned does not include fees and charges, which would reduce an investor’s
returns.