Stocks closed lower on Friday and for the week. The major indexes were all pacing higher for the week going into Friday, but just missed the mark by Friday's close, although not by much.

Friday's mixed Employment Situation report didn't provide much direction. January nonfarm payrolls came in under expectations at 143,000 (111K in the private sector and 32K in the public sector) vs. the consensus for 168,000 (140K private, 28K public). The unemployment rate, however, fell to 4.0% vs. last month's 4.1% and estimates for the same. The participation rate ticked up to 62.6% vs. last month's 62.5%. Average hourly earnings rose 0.5% m/m vs. last month's 0.3% and the consensus for 0.3%. On a y/y basis it came in at 4.1%, in line with last month's 4.1%, but above expectations for 3.8%.

Additionally, November's tally was upwardly revised by 49,000 new jobs to 261K (from 212K), and December's was revised up by 51,000 to 307,000 (from 256K).

The sectors with the biggest job gains came from the following: Health Care added 44,000 new jobs; Retail Trade gained 34,000; Government employment was up 32,000; and Social Assistance jobs grew by 22,000.

So it was a somewhat mixed report. And gave no clear signals, one way or the other, on the direction for monetary policy. Although, I suppose the lack of direction could be inferred as no haste needs to be taken at this time, meaning the continued pause in rate cuts seems more likely.

However, attention this week will shift to inflation data with the Consumer Price Index (CPI ? retail inflation) on Wednesday, 2/12; and the Producer Price Index (PPI ? wholesale inflation) on Thursday, 2/13.

Inflation progress has come to a standstill over the last few months, and even ticked up a bit. Again, nothing overly concerning. But enough so where a pause in rate cuts was warranted.

Nonetheless, the Fed still expects two rate cuts this year (presumably by 25 basis points each). And since they insist they'll be data dependent, every inflation report (and jobs report for that matter) counts.

In other news on Friday, Wholesale Inventories dipped -0.5% m/m, in line with views, but under last month's -0.1%.

And Consumer Sentiment slipped with the Index at 67.8 vs. last month's 71.1 and expectations for 72.0. The year-ahead inflation expectations (also part of that report) increased to 4.3% vs. last month's 3.3% pace.

In addition to this week's inflation reports, we'll also see what President Trump will do regarding the reciprocal tariffs he said he'll be rolling out this week. In short, other countries are charging the U.S. tariffs on select goods, and the U.S. plans to reciprocate. We are already doing that with China. But the European Union, Thailand, Taiwan, Vietnam, Japan, Malaysia and India are likely on the list for enacting new tariffs or increasing existing ones to match what's being done to the U.S.

The announcement could come as early as today or tomorrow.

In the meantime, earnings season continues with another 778 companies on deck to report this week. And that's great news since stocks typically go up during earnings season.

Even though the markets have had their share of volatility so far this year (what year hasn't), the major indexes are all up YTD.

And I'm expecting another banner year of 20%+ in 2025.

See you tomorrow,