Fed Holds, Stocks Go Up and Down, Fire Burns, and the Team That Must Not Be Named

February 1, 2026 THE FED KEEPS RATES STEADY: The Fed met last week and held rates unchanged. When this happens, economists and investors parse the words of the announcement. The Fed statement said U.S. economic growth was "solid," while in earlier announcements it said "moderate." Inflation "remains somewhat elevated." Unemployment has "shown some signs of stabilization." Two Fed governors voted for a rate cut. The Fed believes that inflation has been affected by tariffs, but it is a one-time effect, and their impact is likely to ease in 2026. The next Fed meeting is not until mid-March.

ANOTHER MIXED WEEK: The S&P 500 ended the week up after some ups and downs. The NASDAQ Composite (-0.17%) and the Russell 2000 (-2.08%) were down for the week, as was the Dow Jones Industrial Average. International stocks rose again. The Fed inaction on interest rates surprised no one and did not move markets much. Almost all the big companies that produced their earnings reports last week beat estimates, but evidently not by enough to move markets up. Microsoft beat earnings estimate,s but the stock still fell nearly 8% for the week due to concerns about projected AI spending and its potential to slow growth.

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.

PRODUCER PRICE INDEX RISES: Prices paid by producers rose 0.5% in December. For the entire year of 2025, the PPI index rose 3.0%. In 2024, it was 3.5%. The annual outcome is good (a 0.5% decrease from the prior year), but we will have to watch the months ahead to see if the overall trend continues down despite a December jump.

DURABLE GOODS ORDERS UP IN NOVEMBER: Orders for durable goods in the U.S. rose 5.3% in November. Aircraft orders, a particularly volatile category, were up 97.6%. But even if you remove that, durable goods orders were up 0.5%, a healthy increase. Durable goods orders have been on an upward trend for the past year. Many of the durable goods leading the rise are things like fabricated metal products, machinery, and electrical equipmen,t which should translate into further positive economic activity in the months ahead.

STATE MIGRATION: Over the last five years, the two states that have added the most to their population via migration within the United States (people moving from one state to another) are Idaho and South Carolina. Both have seen nearly a 7% positive change to their population via migration. Delaware is fourth on the list with a 5% increase. New York is the state with the largest negative net migration, losing 5.5% of its population. Next on the list of losing the most, percentage-wise, are D.C., California, Hawaii, and Illinois.

WEEKLY UNEMPLOYMENT CLAIMS DECREASE: In the week ending January 24, 209,000 Americans filed for new unemployment claims, a slight decrease from the prior week. The four-week moving average is 206,250. Some large companies have recently announced some job reductions (Amazon, 16,000, and UPS 30,000), so we will see how those actions impact these numbers in the months ahead.

NEW FED CHAIR: Assuming he gets confirmed, the U.S. will have a new Fed chairman in May. President Trump nominated Kevin Warsh to this role. Warsh has been a Fed governor in the past, from 2006-2011, which means he was there during the financial crisis. In the past, he has been known for being an "inflation hawk," speaking out against easy monetary policy. Recently, he has supported lowering interest rates, but also supports a tighter overall monetary policy. Following his nomination, stocks fell, the dollar rallied, and gold and silver had their worst day in more than forty years.

WORKING LIKE A CHARM: We recently replaced our chimney, and we are now beginning to use it, and it works great! It vents better than the old one. It was especially nice to have a fire roaring after spending hours shoveling ice-covered snow!

HOW DID THIS HAPPEN?: As most of you know, I grew up in Massachusetts, and for a time lived in a house that was so close to the Patriots' (I know, the team that must not be named) stadium in Foxborough that we could hear crowd noise and concerts. Forgive me, but I'm a Pats fan. My big question is how in the world did this team end up in the Super Bowl? I'm not complaining, mind you, but if feels like we are betting with house money at this point. Go Pats! Have a great week!

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dmacgray@stonecropadvisors.com "Debt is acceptable only in an emergency. Prosperity is the time to restore discipline." James Munroe*

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*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the fifth week, and Munroe was our fifth president. SOURCES:

ANOTHER MIXED WEEK: https://myweeklystock.substack.com/p/weekly-market-recap-jan-26-30-s-and?utm_source=post-email-title&publication_id=697043&post_id=186125651&utm_campaign=email-post-title&isFreemail=false&r=s86er&triedRedirect=true&utm_medium=email

NEW FED CHAIR: https://www.wsj.com/economy/central-banking/the-long-campaign-of-kevin-warsh-e5bd26d6?mod=Searchresults&pos=13&page=1 AND https://www.wsj.com/finance/investing/wall-street-cant-decide-whether-kevin-warsh-will-be-a-friend-or-foe-3d344c67?mod=WTRN_pos4

THE FED KEEPS RATES STEADY: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/1/28/nothing,-for-now

DURABLE GOODS ORDERS UP IN NOVEMBER: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/1/26/new-orders-for-durable-goods-rose-5.3percent-in-november

STATE MIGRATION: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/1/29/where-are-americans-moving

DURABLE GOODS ORDERS UP IN NOVEMBER: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/1/30/the-producer-price-index-ppi-rose-0.5percent-in-december

WEEKLY UNEMPLOYMENT CLAIMS DECREASE: https://www.dol.gov/ui/data.pdf AND https://www.wsj.com/economy/jobs/u-s-companies-are-still-slashing-jobs-to-reverse-pandemic-hiring-boom-abf1b94e?mod=economy_feat5_jobs_pos1

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Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.