Weekly Hotline: January 9, 2026
Investors were met with a flurry of macroeconomic data to start the new year, and markets moved higher with a healthy rotation towards defensive and value stocks.
MACROECONOMIC UPDATE
- The Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) ticked down from 48.2% to 47.9% remaining squarely in contraction (<50%). Respondents drew attention to high prices, declining orders, and low morale.
- In contrast, the ISM Services PMI rose from 52.6% to 54.4% as the sector remains in expansion territory (>50%). Service businesses continue to grapple with high prices and policy uncertainty, but growth remains stable.
- Building Permits and Housing Starts came out this morning for the first time since the Government Shutdown in October. The data remains delayed with only September and October figures included in the latest release. Housing Starts fell to the lowest level in over 5 years while Building Permits rose slightly off their low in August. This report showed a definitive lack of strength in the housing market. It will be important to watch for additional developments as more up-to-date information is released.
- The Jobs Report for December showed that employers only added 50k jobs in December, and there was a slight decline in the Unemployment Rate from a downwardly revised 4.5% to 4.4%. Meanwhile, only 584,000 jobs were added in 2025, far below the 2.0 million jobs added in 2024 and the worst year of job growth since 2020. Although it showed a decline in unemployment, this report depicts a job market that lacks growth.
- Consumer Sentiment ticked up from 52.9 to 54.0 in the preliminary January reading. Even with this modest increase, Sentiment sits nearly -25% below its level in January of last year. Consumers continued to express concerns over high prices and the labor market.
TECHNICAL UPDATE
- InvesTech’s Gorilla Index remained below its late October peak this week even as the broader market rose. The Index’s inability to fully participate demonstrates a struggle for big-cap momentum stocks to gain back control.
- InvesTech’s Artificial Intelligence Index also remains off its recent peak – sitting over -18% below its high as of Thursday’s close. It is on track for a relatively flat week as investor speculation continues to fizzle.
InvesTech Model Fund Portfolio
There are no changes in the Model Fund Portfolio this week which has a net invested equity allocation of 53%. This is comprised of 58% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 32% cash held in short-term Treasurys or a money market fund.
