Weekly Capital Markets Watch

US stocks finished mixed as earnings season began. Small-cap and value
stocks outperformed large-cap and growth shares, with the Russell 2000 and
S&P Midcap 400 reaching all-time highs, while large-cap indexes pulled back.
Earnings were mixed: JPMorgan Chase and Citigroup fell on weaker profits,
while Morgan Stanley, Goldman Sachs, and Taiwan Semiconductor
outperformed, boosting AI-related sentiment. Political headlines included
Trump’s proposed 10% credit card interest cap, a 25% tariff on imports linked
to Iran, and a DOJ inquiry into Fed Chair Powell, raising concerns about central
bank independence.

US core consumer prices rose at the slowest pace since March 2021, with
December CPI up 0.2% m/m and 2.6% y/y. Headline CPI increased 0.3% m/m
and 2.7% y/y. November producer prices rose 0.2% m/m and 3% y/y, driven by
energy. Retail sales exceeded expectations (+0.6% M/M), though control
group sales slowed to +0.4% m/m. Housing data beat estimates: new singlefamily
home sales reached 737,000 SAAR in October, existing home sales rose
5.1% m/m in December to 4.35 million, aided by mortgage rates near 6%.

The STOXX Europe 600 gained 0.77% YTD. Major indexes were mixed:
Germany’s DAX and Italy’s FTSE MIB posted modest gains, France’s CAC 40
declined 1.23%, and the UK’s FTSE 100 rose 1.09%. DJIA -0.29% YTD, S&P 500
-0.38% YTD, Nasdaq -0.66% YTD, S&P MidCap 400 +1.33% YTD, Russell 2000
+2.04% YTD.