“Without ambition one starts nothing. Without work one finishes nothing. The prize will not be sent to you, you have to win it.”
-Ralph Waldo Emerson
Here’s what you need to know this week:
- Stocks fall on weakening jobs data but catch a boost on soft inflation
- Why advancements in A.I. may increase demand for companies with tangible products
- A handy explainer on Trump accounts coming tomorrow
Mixed Emotions
Stocks sold off last week on the heels of the nonfarm payrolls (NFP) report for the month of January. The report showed the US economy adding 130,000 in the month of January, much higher than the 70,000 that analysts’ expected:
The report also showed unemployment falling to 4.3%, another good sign. However, investors reacted more strongly to the 2025 revisions that revised total job growth in 2025 from 584,000 to 181,000 jobs[1], making 2025 the weakest year for job growth outside of recession years since 2003:
Markets fell roughly 1% on the news, giving up gains from earlier in the week. Investors regained some optimism on Friday thanks to the Consumer Price Index (CPI) report for the month of January, which showed monthly inflation at 0.2% and annualized inflation at 2.4%[2]:
Both numbers were slightly less than analysts expected, and the annualized figure is now within striking distance of the Federal Reserve’s long-term target rate of 2% flat. The combination of low inflation and low unemployment has given traders more confidence in interest rate cuts from the Federal Reserve this year, and as of writing the bond market is now pricing in three rate cuts in 2026[3].
The “H.A.L.O.” Trade
Artificial intelligence is everywhere these days. Seemingly every corporate earnings report mentions AI, companies are utilizing AI chatbots for customer service, and the Super Bowl featured multiple ads for AI companies. The technology is impressive and advancing rapidly, and recently has disrupted investment markets in some surprising ways.
One of AI’s core competencies is programming; users are able to spin up functions and even entire apps using just a handful of prompts, a process users call “vibe coding”. This has led investors and analysts to question the future of software companies: why would you pay for a software service that you can create for yourself? This in turn has led investors to allocate to sectors that seem more resilient to AI. Josh Brown of Ritholtz Wealth Management dubbed this “the H.A.L.O. Trade”, meaning High Asset, Low Obsolescence[4]. Look at how these sectors have performed relative to software over the last six months:
This makes sense when you think about it. ChatGPT can’t drill an oil well, Copilot can’t fly you to your next vacation, Gemini can’t build a house, Claude can’t hand you a Coca-Cola. In fact, these companies will likely benefit from AI streamlining their processes and giving them more time to focus on their core businesses.
This also doesn’t necessarily spell the end for software companies. Software is more than just the code, it’s customization, customer support, maintenance, upgrades and more. Will large companies trade in their cybersecurity provider for a vibe-coded alternative? Unlikely. This may even be an opportunity for nimble software companies to leverage AI’s capabilities to improve their own products. Still, at the moment it seems that this H.A.L.O. trade thesis neatly explains the current market dispersion.
Trump Accounts Explainer
Part of President Trump’s One Big Beautiful Bill Act (OBBBA) last year created a new type of investment account for children, informally known as “Trump Accounts”. The accounts can be opened starting this year and are eligible for funding starting on July 4th. We wrote an explainer late last year but we will be sending out an updated refresher tomorrow. Be sure to check your inbox if you are interested in learning more!
What Else
- Secretary of State Marco Rubio spoke at the Munich Security Conference in an attempt to assuage European allies’ fears of an isolating America
- Russia and Ukraine trade airstrikes ahead of the next round of peace talks
- Eleven Palestinians were killed by the Israeli as Israel continues to test the limits of the ceasefire
- US negotiators are meeting with Iranian officials in Geneva to discuss the contours of a new nuclear deal
- Norway holds a slim lead in both gold and total medals in the 2026 Winter Olympics but the US is following closely behind
What We’re Reading
Can a wild turkey make a home in New York? In a story that sounds like the plot of a Disney movie, a wild turkey has become a local celebrity in Lower Manhattan. Three local women have assigned themselves as the turkey’s caretakers and named her Astoria; click below to see photos of Astoria’s life in the big city:
What’s Happening Downtown
Midtown’s Ten Buck Lunch Week returns next week, February 23rd – 27th. More than twenty Midtown restaurants will be offering lunch specials for just $10 flat, click below to see a full list of participating restaurants and deals:
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess