Happy New Year! Hope you are all doing well and that your 2026 is off to a great start. The major U.S. stock indexes produced gains of around 2.0% in the first full trading week of 2026. The S&P 500 and the Dow surpassed record highs set two weeks earlier, and the NASDAQ climbed to within 1.2% of its historic peak set more than two months ago. The Russell 2000 Index (small caps) added 4.6% for the week. Over the past month and a half, the small-cap index has added nearly 14%. I have broken down this first weekly update of 2026 using quotes from the 1930 classic All Quiet on the Western Front, which, like Nancy Drew and Betty Boop, entered the public domain this year.
The replacements are all like that. Not even old enough to carry a pack.
Our workforce is getting younger but not smaller. For sure, the labor market is slowing. The economy generated 50,000 jobs in December, and initial estimates for the previous two months were revised downward by a combined 76,000 jobs. Slower job growth is not as bad as it seems. The unemployment rate remained steady at 4.4% in December, which is actually better than forecasted. The U.S. labor force experienced growth throughout 2025. That growth came with an aging demographic (Almost 12,000 people a day turning 65) and a record low in immigration (the US experienced a decline in its foreign-born population for the first time in decades). Historically, the longer-term average unemployment rate in the U.S. is close to 5.5%, and 4% unemployment has long been considered an economy at full employment. So I am continuing to be encouraged by the job numbers.
Every full-grown emperor needs one war to make him famous. Why, that’s history.
The U.S. takeover of Venezuela has begun. Oil prices fluctuated widely amid a heavy flow of geopolitical news affecting commodity markets. The price of U.S. crude fell to as low as $56 per barrel on Wednesday before rebounding to as high as $60 on Friday. The actions in Venezuela may have long-term implications for oil prices, but could cause short-term volatility. The U.S. has indicated that it will now run Venezuela until a safe and judicious transition of power takes place. In addition, the U.S. is planning to rebuild the oil infrastructure in Venezuela, with support from major U.S. energy companies. Venezuela is a relatively small player in terms of its overall economy, which is less than 1% of global GDP. Their oil is important because they have about 17% of the world’s oil reserves. However, for it to bring down oil prices, they need to seriously upgrade the infrastructure. As it represents less than 1% of both the U.S. and global oil trade. The U.S. plans to retain power in Venezuela until a transition of government occurs. How long will that take? Estimates call for 10 years and upwards of 100 billion dollars to revitalize their production. It seems likely that if US companies are going to make that kind of investment, we will need to have some type of US presence in Venezuela longer term.
All right, we’ll have enough for once. Come on, dish out!
Corporations experienced tremendous earnings growth in the last quarter, but they didn’t keep it all for themselves. The growth rate for dividend payments by U.S. companies accelerated in 2025’s fourth quarter. We experienced a $13.1 billion increase in net dividends by companies in the S&P 500. Significantly higher than the previous quarter’s $10.6 billion. As we approach earnings season in the coming weeks, expect 2026’s first-quarter earnings calls to include dividend increases as companies continue to see record-high earnings and sales levels.
Please use my calendar link below and schedule a phone or Zoom appointment. The calendar link allows you to schedule a call as early as tomorrow. If you have a time-sensitive issue and have difficulty reaching me on the phone, it is generally best to use the calendar link to schedule a 15-minute appointment. As we enter the New Year, it is a good time to do a review. If it has been a while since your last review, please schedule.
