by Connor Darrell CFA, Assistant Vice President – Head of Investments
NOTE: Last week, we reported an incorrect number for the December jobs report, which was not released until 1/10. Refer to the “Heat Map” for more details on the most recent employment data.

The U.S. equity market extended its gains last week as tensions between the U.S. and Iran showed signs of easing. Markets seem to no longer anticipate an escalation in the conflict between the U.S. and Iran following what has been seen as a largely unprovocative response to the killing of Qassem Soleimani on the part of the Iranians. With geopolitical risks at a heightened level, there remains the risk for additional unsettling headlines that could spark volatility, but it is unlikely that any such headlines would have a material impact on global markets.

Here in the U.S., the December jobs report came in weaker than anticipated, though the unemployment rate remained at its 50-year low of 3.5%. Wage growth, which had shown signs of picking up during the latter half of 2019, also came in weaker than expected. The 2.9% annual rate of increase was the lowest reading since July of 2018. Month-to-month jobs data tends to be somewhat unpredictable, and we continue to view the employment situation, and tangentially the U.S. consumer, as the strongest component of the U.S. economy. In the coming weeks, we will be watching the beginning of Q4 earnings season for further insights into consumer spending during the holiday season.