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Market Recap
January 12, 2026
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The Markets​
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A change in leadership.
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Last week, investors were presented with a stew of economic and policy developments. These included the surprising announcement that the United States would “run” Venezuela, disappointing jobs data, signs of improved consumer optimism, and a flurry of new policy proposals. Investors weighed what it all means for financial markets, and stocks moved higher.
Here’s what happened:
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Geopolitical tensions heightened. “The arrest and indictment of former Venezuela leader Nicolás Maduro roiled energy markets and raised the specter of military interventions in other parts of the world, including Greenland, a territory controlled by NATO ally Denmark,” reported Martin Baccardax of Barron’s.
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U.S. jobs growth was soft. 2025 was a tough year to find a job. In December, about 50,000 new jobs were added. That was roughly in line with the monthly average for 2025. In total, about 584,000 jobs were created last year, making it “the worst year for hiring since 2020, when the Covid-19 pandemic resulted in an annual loss,” reported Megan Leonhardt of Barron’s.
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Consumer optimism improved. The University of Michigan Consumer Sentiment Index showed that optimism ticked higher. “Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes. All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25 [percent] below last January’s reading,” wrote Surveys of Consumers Director Joanne Hsu.
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The President proposed new policies. On social media, President Trump proposed a slew of new policies that would:
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• Prohibit investment groups from buying single-family homes. In recent years, private equity and other groups have invested heavily in housing, lifting demand and housing prices. After the post, stocks of home builders fell to their lowest level in three years, according to John Authers of Bloomberg.
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• Have the government buy $200 billion in mortgage bonds. The intent is to make housing more affordable by having government housing entities Fannie Mae and Freddie Mac purchase mortgage bonds. Analysts had mixed opinions about whether the purchases would push mortgage rates lower, reported Josh Wingrove, Scott Carpenter, and Katy O'Donnell of Bloomberg. Mortgage bonds and home lender stocks rallied.
• Require defense firms to prioritize reinvestment. He indicated the firms should “end stock buybacks, stop issuing dividends and cap executive pay until they invest more in factories and research,” reported Phil Serafino of Bloomberg. After the post stocks of defense companies fell.
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• Increase defense spending from $1 trillion to $1.5 trillion dollars in 2027. “The U.S. government is the largest customer of many defense contractors, but it doesn’t have an equity stake or a golden share that can dictate board-level policies. The executive order references the Defense Production Act, a 1950s law, which authorizes the government to compel companies to prioritize its orders over commercial concerns during national emergencies,” reported Al Root of Barron’s. The stocks of defense companies recovered some lost ground after the post, reported the Associated Press.
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By the end of the week, market leadership appeared to be changing, as investors leaned into smaller companies and value stocks. “So far this year, areas like materials and industrials are far outpacing tech names. And small-caps are doing the best of all,” reported Avi Salzman of Barron’s.
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At the end of the week, market major U.S. stock indexes were higher. The yield on the benchmark 10-year U.S. Treasury finished the week near where it started it.​
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Sources:
https://www.barrons.com/articles/stock-market-donald-trump-dow-defense-housing-f2a888d6?mod=hp_LEDE_C_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Barrons-Stock-Market-Fundamentals%20-%201.pdf
https://www.barrons.com/livecoverage/december-jobs-report-today?mod=hp_LEDE_C_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Barrons-Jobs-Report-Today%20-%202.pdf
https://www.sca.isr.umich.edu or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-UoM-Surveys-of-Consumers%20-%203.pdf
https://www.bloomberg.com/opinion/newsletters/2026-01-08/k-now-means-kicking-private-equity-out-of-the-house or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Bloomberg-K-Now-Means%204.pdf
https://www.bloomberg.com/news/articles/2026-01-08/trump-directs-200-billion-mortgage-bond-buy-in-housing-push? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Bloomberg-Trump-Tells-Fannie%20-%205.pdf
https://www.bloomberg.com/news/newsletters/2026-01-08/the-jawboner-in-chief-is-back-and-moving-markets? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Bloomberg-The-Jawboner-in-Chief%20-%206.pdf
https://www.barrons.com/articles/aerovironment-stock-price-defense-trump-winners-losers-e25dd177? or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Barrons-Defense-Stock-Winners%20-%207.pdf
https://apnews.com/article/trump-defense-contractors-dividends-buybacks-876b67b72369551340124c5e137bc89d
https://www.barrons.com/articles/ai-bubble-tech-small-caps-ce55f11d?refsec=the-trader&mod=topics_the-trader or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Barrons-Its-The-End-of-the-World%20-%209.pdf
https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Barrons-DJIA-S&P-Nasdaq%20-%2010.pdf
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2026
https://finance.yahoo.com/news/average-car-cost-were-born-130001087.html
https://fred.stlouisfed.org/series/MSPUS
https://www.schwab.com/learn/story/how-do-401ks-work-frequently-asked-questions
https://www.schwab.com/learn/story/understanding-457b-vs-403b-retirement-plans
https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500#:
https://www.irs.gov/retirement-plans/403b-plans-catch-up-contributions
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-457b-contribution-limits
https://view.e.economist.com/?qs=4fcbe5b0ecec364eec5f043929a3543c199a014e84e80f9d00815c170a7b6652a7ac6210b37c78a4e3dec8ff30688efc3f7b23f6ed50e1c048d0b6cdf0b0f56c193248706abf330cdca5c96249b47cfc or go to https://resources.carsongroup.com/hubfs/WMC-Source/2026/01-12-26-Economist-Money-Talks%20-%2019.pdf