January market review

January market review

Despite
uncertainty surrounding inflation, interest rates, the political landscape and
a new disruptor in the artificial intelligence (AI) race, domestic equities
ended the first month of 2025 broadly positive, reflecting a continuing
optimism for the U.S. economy. AI-themed stocks were shaken by a new entrant
into the space, China’s DeepSeek, which claims to be more efficient in various
ways, especially power consumption, than key competitor OpenAI’s ChatGPT.

“With
mega-cap tech valuations stretched, those companies were vulnerable to a
pullback,” said Raymond James Chief Investment Officer Larry Adam. “While the
NASDAQ took most of the hit, the performance of the equal-weight S&P 500
versus the capitalization weighted index shows signs of the market broadening
beyond tech that we hope will continue.”

Amid the many changes that greeted the new year, including the
inauguration of President Donald Trump, the Federal Reserve held interest rates
constant, as expected, as the Federal Open Market Committee (FOMC) awaits clear
signs that inflation will continue to slide toward target levels and insight
into the federal government’s trade and fiscal priorities.

The year started off strong, but time will tell whether that trend
will hold. Uncertainty remains a familiar theme moving forward as inflation
remains sticky and the policy decisions of a new administration begin to take
shape. Expect volatility and emotional reactions in the markets in the coming
months, but with a positive overall trend throughout the year.

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.

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. 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. Investing in small
cap stocks generally involves greater risks, and therefore, may not be
appropriate for every investor. The Bloomberg Barclays US Aggregate Bond Index
is a broad-based flagship benchmark that measures the investment grade, U.S.
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. Companies engaged in
business related to a specific sector are subject to fierce competition and
their products and services may be subject to rapid obsolescence. There are
additional risks associated with investing in an individual sector, including
limited diversification. A credit rating of a security is not a recommendation
to buy, sell or hold the security and may be subject to review, revision,
suspension, reduction or withdrawal at any time by the assigning Rating
Agency. Bond prices and yields are
subject to change based upon market conditions and availability. If bonds are
sold prior to maturity, you may receive more or less than your initial
investment. Income from municipal bonds is not subject to federal income
taxation; however, it may be subject to state and local taxes and, for certain
investors, to the alternative minimum tax. Income from taxable municipal bonds
is subject to federal income taxation, and it may be subject to state and local
taxes. Investing in commodities is generally considered speculative because of
the significant potential for investment loss. Their markets are likely to be
volatile and there may be sharp price fluctuations even during periods when
prices overall are rising. International investing involves special risks,
including currency fluctuations, differing financial accounting standards, and
possible political and economic volatility. . The Consumer Price Index is a
measure of inflation compiled by the US Bureau of Labor Studies. The Leading
Economic Index (LEI) provides an early indication of significant turning points
in the business cycle and where the economy is heading in the near term. This is not a
recommendation to purchase or sell the stocks of the companies pictured/mentioned. The ISM
Services Index is an economic index based on surveys of more than 400
non-manufacturing (or services) firms’ purchasing and supply executives. The
ISM Manufacturing Index, also known as the purchasing managers’ index (PMI), is
a monthly indicator of U.S. economic activity based on a survey of purchasing
managers at more than 300 manufacturing firms. Material created by Raymond James for
use by its advisors.