Technology (XLK) took a break yesterday, and the rest of the market caught a bid, including Energy (XLE).

With momentum and growth giving way, investors rediscovered small-caps.

Top Advancers

Also, joining oil stocks were homebuilders, as the Trump administration continues its efforts to address housing affordability. 

Productivity

Labor productivity erupted higher, corresponding with a sharp decline in unit labor costs. This is huge and could have a greater impact on artificial intelligence (AI) than economists are willing to consider or admit.

Output was higher, as hours worked slowed, and compensation eased from a year earlier.

Tariffs are working, and this year should see a ramp-up of onshoring and reshoring.

Today’s Session

This morning’s jobs report was mixed.  Headline 50,000 was below the consensus of 73,000, but participation declined. 

Hourly wages rose 3.8% from a year ago, better than the expected 3.6%.

The private sector saw only 37,000 jobs, which may be fine for economists, but not enough for Main Street. I think there will be a boom in construction and manufacturing this year.

Now we wait for the Supreme Court’s decision on President Trump's IEEPA tariff deployment.  Thus far, $133.5 billion has been collected under this tariff provision. 

There are other ways to tariff the same goods, but it’s a longer process.  I’m hoping for an elegant solution that doesn’t trigger massive refunds and maybe set back major tariff agreements.

Comments

Really love your "elegant solution" comment. Seems like that would be the best for all involved. In the mean time, let's ride this bull. Mike Mayone on 1/9/2026 9:54:12 AM

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