Each week, we break down the key events and market movements shaping the investing landscape. From economic data to investor sentiment and global headlines, this section captures what mattered most, and how it impacted markets.
Strong Jobs Data Pushes Rate Cut Expectations Further Out
January’s jobs report was stronger than expected, with 130,000 new positions added, roughly double forecasts, and unemployment falling to 4.3%. This is positive for the broader economy, as employed consumers continue spending, supporting business profits.
However, the strength reduces the likelihood of near-term rate cuts, with markets now expecting the first cut around July. For investors, this environment favours companies with strong cash flow, as higher rates reward businesses that rely less on borrowing. It also allows shorter-term bonds to continue offering attractive yields while the rate outlook evolves.
AI Investment Boom Creates New Dynamics in Bond Markets
A record wave of corporate borrowing tied to artificial intelligence investment is reshaping the bond market. Major technology companies could add as much as $120 billion in new bonds this year to fund their AI ambitions, significantly changing the makeup of the corporate bond universe. The positive news is that these are financially strong companies with excellent credit profiles.
The consideration is that bond index funds are absorbing much of this new supply, which could shift how corporate bonds behave over time. For our portfolios, this reinforces the importance of thoughtful, active bond selection rather than simply buying an index, allowing us to capture attractive yields while managing evolving risks.
Tech Pullback Highlights Importance of Diversification
Markets pulled back as investors reassessed expectations around artificial intelligence profitability. The Nasdaq fell 1.4% and the S&P 500 declined 1%, with software companies leading losses while defensive sectors held up better.
This shift from broad AI enthusiasm to a more selective evaluation of winners and losers is a healthy sign, reflecting a more thoughtful approach to capital allocation. While the largest technology companies remain fundamentally strong, this environment reinforces the value of a disciplined, diversified strategy that balances growth opportunities with defensive positions to help manage short-term volatility.
Key Drivers To Our Outperformance
We believe in transparency when it comes to where outperformance is coming from. This section spotlights a top-performing company we hold, a sector where we’ve taken a winning position, and a strategy that has driven recent success across our portfolios.
Top Company: Novo Nordisk A/S (NVO)
Novo Nordisk was our top performer last week, rising 13% as confidence grew in long-term demand for weight-loss and diabetes treatments. As the global leader in GLP-1 therapies, the company is at the forefront of treating obesity and type 2 diabetes.
Trading at roughly 13 times expected earnings, it sits at a discount to many pharmaceutical peers, suggesting continued upside potential. Novo Nordisk combines strong profitability and reinvestment discipline with leadership in a healthcare category still early in its global growth. For our portfolios, it offers the stability of a major healthcare company alongside exposure to one of the most important medical trends in decades.
Top Sector: Information Technology
Information Technology again led portfolio performance, with strength across holdings. Vertiv surged 33%, while Oracle, Taiwan Semiconductor, NVIDIA, Broadcom, and Apple gained between 6% and 15%. AI investment, government support for domestic chip production, and stabilizing rates are supporting the sector.
Our holdings are established leaders with strong cash flow, competitive advantages, and exposure to long-term structural trends. While valuations remain elevated in parts of the sector, earnings growth and positioning continue to support our allocation.
Top Quant Strategy: Value
Our Value strategy delivered the strongest style contribution, led by industrial and energy holdings. Caterpillar and Iron Mountain were the top contributors, followed by Exxon Mobil, JPMorgan Chase, and Chevron.
Investors are rewarding companies with solid cash flows, strong balance sheets, and reasonable valuations. Economic resilience continues to support industrial and energy names, while financials like JPMorgan benefit from steady growth and stable rates. With both growth and value contributing, the market backdrop appears more balanced, reinforcing our diversified approach across sectors and styles.
What To Look For This Week
We also look ahead to the economic reports, events, and earnings that may influence the week ahead. From inflation and jobs data to corporate updates from key market players, this section keeps you informed on what’s coming, and why it matters.
Federal Reserve Meeting Minutes, Wednesday, February 18
Wednesday afternoon the Federal Reserve releases the detailed minutes from its January 27-28 meeting, where policymakers voted 10-2 to hold interest rates steady at 3.50% to 3.75%.
What makes these minutes especially interesting is that Governors Stephen Miran and Christopher Waller both voted to cut rates, signalling a meaningful difference of opinion about the path forward. Chair Powell noted the economy is entering 2026 on "firm footing" but acknowledged inflation remains "somewhat elevated." Investors will read closely for hints about what conditions would need to change before the majority supports a rate cut, helping shape how we position bond holdings and rate-sensitive investments.
Weekly Jobless Claims and Philly Fed Manufacturing, Thursday, February 19
Thursday brings two reports that together paint a picture of the job market and manufacturing sector. Weekly jobless claims remain one of our most timely indicators of employment health, with recent data encouraging: initial claims came in at 231,000 following a brief winter storm-related spike, while continuing claims fell to 1.83 million, the lowest since September 2024.
We will be watching for signs that businesses are reducing staff in response to higher costs or shifting trade policies. Alongside claims, the Philadelphia Fed Manufacturing Index offers early clues about factory activity and business confidence heading into spring.
Q4 GDP and Core PCE Inflation Data, Friday, February 20
Friday is the biggest data day of the week, with two major reports landing together. The Bureau of Economic Analysis releases the advance estimate of fourth-quarter GDP growth, our first official look at how the U.S. economy closed out 2025. This release was delayed from January due to the government shutdown, making it even more closely watched after the impressive 4.4% third-quarter growth.
Alongside GDP, the December Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, will be scrutinized for signs that price pressures are easing. Together, these reports will shape expectations for the Fed's March meeting and could influence both stock and bond markets heading into the final week of February. Fed’s next move at its March meeting and could influence both stock and bond markets heading into the final week of February.
Source of All Economic Data: Bloomberg