Markets kicked off 2026 on a positive note, with investors finding plenty to celebrate in the new year.
Despite some mid-month choppiness, major indices finished broadly higher as improved market breadth helped support the general trend. Economic data remained somewhat mixed as GDP growth was revised higher, inflation matched expectations, and the labor market reported slowing jobs gains (though the unemployment rate ticked lower).
The CRSP US Small Cap Index led the way, surging 4.62% as investors rotated into smaller companies. The Dow Jones Industrial Average, S&P 500, and Nasdaq 100 also posted solid gains, climbing 1.80%, 1.45%, and 1.23% respectively. Value stocks outperformed growth for the month, while defensive sectors held a slight edge over more cyclical sectors – a sign that investors remained cautious despite the overall positive tone.
International markets outpaced their US counterparts, with developed international stocks advancing 5.97% and emerging markets gaining 5.04%. Global stocks benefit from a weaker US dollar, more reasonable valuations, and a shift away from the more concentrated AI tech trend that’s been in place in recent years.
Bonds were relatively flat in January as interest rates saw a modest upward movement. Aggregate US bonds edged up just 0.11% as the 10-year Treasury yield rose from 4.18% to 4.26%. The Fed held rates steady during the month, pausing its recent rate cut campaign amid some uncertainty surrounding the outlook for 2026. While the central bank signaled a flexible stance, investors are recalibrating their expectations for how many cuts might come this year.
As we start a fresh year, January reminded us that diversification continues to matter. The rotation toward small-cap and value stocks highlights how market leadership can shift, and maintaining a balanced approach helps capture opportunities across different market conditions. Staying disciplined with a long-term investment strategy, rather than chasing short-term trends, remains the key to navigating whatever 2026 brings.
What happens in Vegas doesn’t always stay in Vegas…
Sphere Entertainment announced plans to build a smaller version of its iconic Las Vegas venue about 15 minutes south of Washington D.C.
The “mini-Sphere” will seat 6,000 people, roughly one-third the size of its Vegas counterpart, but will feature all the same bells and whistles. That includes the massive high-resolution screen, immersive sound system, 4D effects, and an exterior display for ads and artwork.
While the venue is best known for its concerts and residencies, it also has daily programming, most notably a remastered version of The Wizard of Oz
CEO James Dolan says the company has always focused on “creating a global network of Spheres,” with a full-sized version already under construction in the United Arab Emirates. It looks like the future is round.
Chim chiminey, chim chiminey, chim chim cher-ee. A sweep is as lucky as lucky can be.
Chimney sweeps are making a comeback in London. According to the National Association of Chimney Sweeps, memberships have climbed from roughly 590 in 2021 to 750 today.
The resurgence stems from a couple main factors. Most notably, energy costs have been climbing higher, driven in part by surging electricity demand from AI data centers and an aging power grid that requires costly upgrades.
Add in geopolitical tensions that have raised concerns about power grid reliability, and homeowners are looking for backup heating options.
Thankfully, gone are the days of sending small children up the chimneys to do the cleaning. While the job remains fundamentally the same, modern sweeps now use digital cameras, drones, and industrial vacuums.
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | 1.45% | 1.75% | 1.45% | 16.39% |
| NASDAQ (QQQ) | 1.23% | -1.02% | 1.23% | 19.67% |
| Large Cap Growth (VUG) | -1.29% | -3.37% | -1.29% | 15.63% |
| Large Cap Value (VTV) | 4.59% | 8.09% | 4.59% | 15.51% |
| Small Cap Growth (VBK) | 3.55% | 3.13% | 3.55% | 7.83% |
| Small Cap Value (VBR) | 5.34% | 8.56% | 5.34% | 10.91% |
| Developed International (VEA) | 5.97% | 10.40% | 5.97% | 37.15% |
| Emerging Markets (VWO) | 5.04% | 4.75% | 5.04% | 30.86% |
| REITs (VNQ) | 2.61% | 2.74% | 2.61% | 4.22% |
| Aggregate Bonds (BND) | 0.22% | 0.51% | 0.22% | 6.68% |
| Corporate Bonds (VCIT) | 0.24% | 1.07% | 0.24% | 8.88% |
| High Yield Bonds (JNK) | 0.63% | 2.06% | 0.63% | 7.98% |
| Long Term Treasuries (VGLT) | -0.13% | -1.81% | -0.13% | 4.61% |
| International Bonds (BNDX) | 0.52% | -0.19% | 0.52% | 3.14% |
Market Health Indicator
The Market Health Indicator (MHI) measures market health on a scale of 0 – 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.
Fun Facts
- Montpelier, Vermont is the only state capital without a McDonald’s. It also has the smallest population of any capital, with roughly 8,000 residents.
- On January 26, 1924, American speed skater Charles Jewtraw became the first-ever Winter Olympics gold medalist
- “Forty” is the only number with its letters in alphabetical order when spelled-out.
- The canopy of the Amazon rainforest is so dense it can take approximately 10 minutes for a rain drop to reach the ground.
– The Aspire Wealth Team
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