The Week Ahead – New Year’s Resolution

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

A new year, a new you. The start of the year is always a great time to reflect on the past year and to plan for the new year, which of course inevitably means a New Year’s resolution. With week one of the new year finished, are you still on board with your new year’s resolution? After reading about NBA basketball star Kyrie Irving’s change to a vegan diet (and seeing him play the first few months of the new season), I’ve challenged myself to a New Year’s resolution of utilizing a vegan diet five days of the week. After visiting the local grocery store multiple times for fresh produce, I now realize how time intensive my New Year’s resolution is. Now a less time intensive New Year’s resolution that all investors should accomplish at the start of the year is to revisit one’s risk profile. With global equity markets producing strong returns in 2017 (and another hot start to kick off the first week of the year), now would be a great time to review one’s long-term risk tolerance and goals.  

The December jobs report was a bit weaker than expected, with nonfarm payrolls increasing only by 148,000 versus expectations of 190,000. The unemployment rate held steady at 4.1% however the underemployment rate ticked up to 8.1%. Wage growth saw some positive movement, increasing 0.3% for the month of December, leaving the year over year unchanged at 2.5%. In the week ahead we’ll get another inflation reading via the Consumer Price Index which will be closely monitored as usual. With the latest employment data out, the market is currently pricing in a 68% chance of a March rate hike. Will we see a repeat of last year’s rate hike schedule of March, June, then December?

Data deck for January 6 –January 12: