Weekend Update, February 9th, 2026
A Very Bullish Friday
Index, Sector, and Asset Performance
The value tilted and non-market cap weighed Dow Jones Industrial Average surged past 50,000 last Friday on the back of sector rotation and expectations of future Fed rate cuts. Last Friday that index closed up +2.5%, to reach 51,116. After back-to-back volatile few weeks, the DJI, S&P 600, and Nasdaq 100 all closed up +2% or higher on Friday. Even so, the S&P 500 fell last week by -.1% led by a decline in consumer discretionary (AMZN) offset by rallies in consumer staples (COST, WMT, PEP). YTD the S&P 500 is up +1.3%.
The consumer discretionary sector had the biggest percentage decline, falling to -4.6%, followed by a -4.4% decline in communication services and a -1.4% loss in technology.
Amazon.com had the biggest drop in consumer discretionary, falling -12% in the week as the company posted much higher capex. Amazon forecast operating income of $16.5 billion to $21.5 billion for the ongoing quarter.
Take-Two Interactive Software (Grand Theft Auto) was among the top decliners in communication services. The company reported a fiscal Q3 loss of -$0.50 per diluted share, wider than the loss of -$0.39 per share expected. Shares fell -11%.
Consumer staples rose +6%, followed by a +4.7% increase in industrials and a +4.3% rise in energy. Materials added +3.5%, while health care, financials and real estate also rose by more than 1% each.
Hershey led gains in consumer staples with a +19% jump as the candy company reported Q4 adjusted earnings per share and sales above analysts’ expectations and forecast 2026 adjusted EPS above the Street view. Cocoa prices collapsed over the last 12 months, allowing Hershey relief from previous product margin squeezes.
PepsiCo was a top gainer in consumer staples, climbing +11%. PepsiCo also announced a 4% increase to its annualized dividend.
The appointment of Kevin Warsh to the post of Federal Reserve Board governor, which President Donald Trump announced a week ago Friday (the lead candidate over a year ago), threw some momentum trades into a tailspin. Investors revised their short-term forecasts for monetary policy.
Warsh previously served on the Fed’s board during the administrations of George W. Bush and Barack Obama from 2006 to 2011. He joined the board at the age of 35, becoming the youngest member of the regulator’s leadership at that time. If the U.S. Senate approves Warsh’s candidacy, he will succeed Jerome Powell in May 2026.
Economic Indicators and Earnings Commentary
The labor markets continue to slow and weaken. On the economic front, ADP reported employment in the US private sector increased less than expected in January. Investors continue to await government data on January’s jobs after the Bureau of Labor Statistics pushed back its monthly payrolls report to Feb. 11.
US real GDP forecast for 2026 is 2.5% versus the Fed’s forecast of 2.3% and the Wall Street consensus of around 2%. The main drivers of GDP are the continued capital expenditure spending by big technology firms, a resilient consumer and the impact of tax refunds in coming months, as estimates suggest refunds may be US$100 billion to US$150 billion over 2025.
US consumer sentiment reached its highest reading since August but remained low compared with YTY levels amid inflation concerns results from a University of Michigan survey showed.
The economic calendar will be the January jobs report on Wednesday. Other economic data due next week will include the January consumer price index, a key inflation measure, on Friday.
Earnings reports expected this week features Coca-Cola (KO), Cisco Systems (CSCO), McDonald’s (MCD), T-Mobile US (TMUS), Applied Materials (AMAT) and Arista Networks (ANET), among other company
Per Goldman: Consensus expects S&P 500 EPS growth of 7% year/year in 4Q 2025, but this forecast appears too conservative once again. S&P 500 EPS grew by 10% or more during each of the first three quarters of 2025, exceeding analyst estimates by an average of +6 pp.
Commodities and Currencies
Oil crossed above $62 on geopolitics and concerns over Iran.
Copper, gold, silver and other industrial metals have hit new ATHs and are up materially YTD on geopolitical concerns and a fear of global currency devaluation. Precious metals like gold and silver continue their volatile yet strong performance with gold between $4800-m 5000 and silver between about $75-110/oz. Silver, which last year significantly outperformed gold, plummeted -32% to trade at about $80 an ounce. This is the biggest drop for silver metal since 1980.
Copper also declined after gold and silver, retreating from recent highs. After reaching a record high of over $14,000 per ton on Thursday, the copper price fell to around $13,800 last Friday
Crypto assets and bitcoin have been volatile since pulling back from their mid-summer $125k ATH and sit near $68k, -45% off its highs.
The US dollar was weaker last week and lower this morning on China Treasury bond comments.
Stock Talk
2026 Market Outlook Summit Livestream Recap
Per Seeking Alpha:
Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
