NEWS FLASH
📉 24/7 Trading Trap: Charles Schwab's rollout of 24-hour trading might be less of a breakthrough and more of a breakdown waiting to happen. The brokerage giant's expansion of trading hours to 8 PM - 3 AM comes with a psychological price tag that could hit investors where it hurts most—their portfolio. Research suggests that after-hours traders are more prone to risky decisions and impulsive moves, with fatigue-addled minds making choices their well-rested selves might regret. While Schwab touts this as meeting customer demand, behavioral experts warn it's essentially removing the cooling-off period that often saves investors from their worst instincts. Pro tip: Maybe stick to trading when the sun's up and your judgment isn't down.
🏦 Treasury Tranquility: Despite Trump's tariff theatrics and trade war rumblings, Treasury yields are displaying an almost puzzling serenity. The 10-year yield has actually dipped to 4.51%, well below January's 4.80% peak, while the policy-sensitive 2-year yield lounges at 4.22%. Fed funds futures seem equally unruffled, pricing an 83.5% chance of unchanged rates at March's meeting. Even as the President ping-pongs between threatening 25% tariffs on Canada and Mexico (while maintaining China's 10% hit), bond markets appear to be betting that any inflation spike would be temporary at best. San Francisco Fed's Mary Daly agrees, suggesting there's no need for preemptive strikes against phantom inflation threats.
💥 Hot Numbers, Cold Comfort: January's inflation report sends markets into a tailspin as consumer prices jump more than expected. The monthly CPI surged 0.5%, pushing the annual rate to 3%—both exceeding forecasts and dampening hopes for imminent Fed rate cuts. Shelter costs remain the persistent thorn, accounting for 30% of the increase, while egg prices soared a startling 15.2% due to avian flu disruptions. Markets have now pushed potential rate cut expectations to September, even as Fed Chair Powell cautions against overreacting to single data points. The silver lining? At 3%, inflation still sits below its historical average of 3.5%, suggesting this apparent wave might be more ripple than tsunami.
RETIREMENT ARTICLES
What We're Reading
- A proposal to fix Social Security that we could enact today (Center for Retirement Research)
- When tariffs are good (Noahpinion)
- Are Health Savings Accounts (HSAs) worth it? (Kitces)
- If you’re not learning something new, you should be (Darius Foroux)
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How guaranteed income can boost retirement spending (Morningstar)​
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Never pay a medical bill without asking these questions first (Vox)​
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The impact of cognitive decline on investment decisions (Wealth Management)
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A shift from traditional to innovative investment strategies (The Leading Edge)​
CHART OF THE WEEK
Strong Start, Strong Year? Historically, if January has positive returns (orange line), the stock market tends to perform well for the rest of the year, averaging about a 16.9% gain by December. However, when January is negative (blue line), the market struggles and often ends the year slightly down -1.8%. While nothing is guaranteed, the current trend suggests that a strong January could be a good sign for investors in 2025.