U.S. economic data continue to show mixed but resilient momentum, with consumer sentiment and job growth surprising to the upside even as retail sales soften and inflation pressures remain concentrated in essential categories. At the same time, stock market leadership is rotating away from the Magnificent 7, short interest in technology is rising, and sector performance is diverging—highlighting a more selective and shifting investment environment in 2026.

 

US Economy

 

The University of Michigan consumer sentiment index unexpectedly rose to 57.3, beating the consensus estimate.

 

Source: @markets   Read full article

 

Since late 2019, inflation has been most acute in household and transportation essentials—led by motor vehicle insurance and utilities.

Retail sales stalled in December and meaningfully missed expectations, signaling consumer fatigue. Headline sales were flat month over month after rounding, while the key “control group”—a direct input for GDP—unexpectedly fell.

 

 

The Atlanta Fed’s GDPNow model is now tracking Q4 GDP at 3.7%, down from 4.2% on February 2 but still solid.

 

 

Nonfarm payrolls rose by a surprising 130k in January, well above the 70k consensus and marking the highest monthly job gain since December 2024.

Here are the reasons cited for job cuts in 2025.

 

 

More nations are mulling social media bans for teens.

 

 

US Stock Market

 

The Magnificent 7 has underperformed the rest of the S&P 500 members by about seven percentage points this year.

 

 

Short interest in XLK, the Technology Select Sector ETF, is at the highest level of this decade.

 

Source: @SubuTrade

 

The consumer discretionary sector fell below its 200-day moving average. Consumer staples surged to an eighth record high for 2026. Financials have underperformed the broader market for five consecutive days, with the ratio to the S&P 500 falling to the lowest level since July 2024. In contrast, the real estate sector has gained for five consecutive days. The trailing 5-day underperformance of communication services relative to the S&P 500 is the worst since July 2024. Industrials relative to the S&P 500 have surged to the highest level since March 2023. Silver fell below its 50-day moving average.

 

 

Great Quotes

 

“If you want to lift yourself up, lift up someone else.” – Booker T Washington

 

Picture of the Week

 

Sanctuary of Las Lajas, Columbia