It is almost hard to believe we are quickly approaching the 6th anniversary of the worst of the COVID-19 pandemic. I remember it almost as though through a fog. In some ways, that whole timeframe seems dreamlike.
Back then, unless my experience was unlike others, it wasn’t uncommon for folks to speculate about how we would conduct our lives and businesses after the pandemic. Someone, somewhere at some point coined the term New Normal to describe this.
Here at Oakworth, our Investment Committee went so far as to publish an entire magazine on what we thought the future would hold. Many of our predictions were fairly prescient, and others have been laughably wrong thus far.
Unfortunately, 6 years hence, I am still waiting for this New Normal to arrive, or anything that approaches what I used to consider normal.
As just about everyone on the planet probably knows, a couple of Saturdays ago, according to widespread media reports, the United States surgically removed President Nicholas Maduro from Venezuela. Although the tension had been building in the waters off the coast of South America for some time, I was still a little surprised it happened as quickly and neatly as it did. In and out, or at least that is the way it seems in the media.
The international response? To be sure, there have been various condemnations and strongly worded communiques from a host of players on the international stage. However, when push comes to shove, it has effectively been, well, crickets. The U.S. has Maduro in custody, and the Trump administration isn’t going to set him free.
Now, it appears the White House has its sights set, again, on Greenland. You know, that thinly populated, large ice-covered island at the top of the world. The same one which doesn’t show up in casual conservations very often, at least not mine. THAT Greenland.
As for that, given what the U.S. just did to spirit Maduro away, the media and the market participants are speculating about geopolitical implications. Who is going to stop it if it wants to take Greenland? Denmark, of which Greenland is a part? Any of the EU countries or even the EU itself? Russia, who is already embroiled in one major conflict and would undoubtedly love to see NATO tear itself apart? China, who has arguably bigger fish to fry closer to home and isn’t an Arctic country?
Yes, the last couple of weeks haven’t met my definition of normal, nor my hopes for the New Normal. However, from all outward appearances, investors seem to think all of this is peachy keen. If not that, it certainly isn’t any cause for alarm.
Nor is a decidedly mediocre Employment Situation – December 2025 report, and I feel as though I am being generous describing it as such.
Last Friday, the Bureau of Labor Statistics (BLS) released data which suggested the U.S. economy created a somewhat paltry 50K net, new payroll jobs in December 2025 in total. For its part, the private sector officially created 37K net, new jobs. According to the report, of these, 13.0K were in ‘Social assistance – Individual and family services.’ 14.1K were in the ‘amusement, gambling and recreation industries,’ and another 27.2K were in ‘food services and drinking places.’
Let’s do the math: 37.0 – 13.0 – 14.1 – 27.2 = (17.3). Therefore, outside of those aforementioned industries, the economy actually shed over 17K jobs. I mean everything else, from manufacturing to construction to financial services to utilities to retail and wholesale trade to information and communications to general business services to you name it, the economy lost jobs.
Okay, any job growth is better than no job growth, and any job is better than no job. I won’t argue that. However, I would suggest it would have been nice to see some employment strength in some of the higher paying economic sectors.
Basically, it was a weird little report at a weird point in history. However, again, none of this seems to have bothered investors.
To that end, according to my Bloomberg screen, as of 1:39 CST on Friday, January 9, 2026, the year-to-date return on the S&P 500 index, is 1.88%. As of 1:45 CST, the NASDAQ is up 1.97%, and the Dow Industries Average has climbed 2.98%.
Those aren’t the type of broad market index results one would expect IF investors were pessimistic about the current state of affairs. Intuitively, it would seem that folks would be selling their risky assets if they felt ‘things’ were going to take a ‘turn for the worst,’ or the situation was bleak.
Nope. If history serves as a guide, and I am supposed to emphatically say it does NOT, these are the types of returns one would expect if investors were encouraged about the prospects of future economic growth and increased corporate profitability. Or so it would seem. Heck, I have only been in this industry for 34 years.
I haven’t even touched on the turmoil in Iran, the seizing of Russian-flag ships in the Atlantic Ocean, the mess in Minnesota, continued conflict in the Middle East, war in Eastern Europe, flashpoints on the Indian-Pakistan and Thailand-Cambodia borders, strife in the South China Sea, and a host of other unpleasantries.
And yet, again, the markets don’t seem to care. In fact, despite all the various polls and surveys to the contrary, Americans apparently feel pretty good about things. I mean, how else can you explain the Federal Reserve Bank of Atlanta’s 5.1% prediction for Gross Domestic Product (GDP) growth for the fourth quarter of 2025? You read that right. As of January 9, 2026, at 2:04 pm CST, the Atlanta Fed is predicting the U.S. economy grew a shade over 5% during the last calendar quarter. The link provided will update periodically and could, therefore, be different.
Or is the “New Normal” for the U.S. economy a surprisingly strong third quarter GDP reading of 4.3% followed by another potentially as high as 5.1%? This, IF everything were truly falling apart. Better asked, IF Americans really thought the events unfolding around them had the ability to detrimentally impact economic activity and corporate profitability?
One would suspect probably not.
But, then again, riddle me this: how does the sluggish labor markets and sour consumer confidence juxtapose with the global turmoil and strong start to the year in the markets? If you answered: “it sort of doesn’t,” you could be onto something.
As such, I suppose I should say: “Welcome to the New Normal or, at least, what passes for normal in 2026. We may be in for another crazy year.”
Thank you for your continued support. As always, I hope this newsletter finds you and your family well. May your blessings outweigh your sorrows on this and every day. Also, please be sure to tune into our podcast, Trading Perspectives, which is available on every platform.
Chief Economist/Chief Investment Officer, Oakworth Asset Management
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