Frederica Focus | Santa Brings Joy for the DOW

I hope that everyone's 2026 is getting on well.  It's hard to believe this year is already 2 weeks old.  Mason was kind enough to remind me that we are closer to 2050 than 2000.  Let that sink in.

In that train of thought, if you haven't gotten your estate planning in place, PLEASE let us help facilitate it. My goal this year is to make sure everyone reading this is completely confident that if 2026 is their last year, their wishes for their estate will happen.

If you do nothing, that is a choice.  And a bad one.

Finally, Santa Visits the Dow, But Not S&P, Nasdaq

Stocks kicked off the week higher, led by the Dow, as markets largely shrugged off headlines out of Venezuela.  By Monday's close, the Santa Claus rally was official for the Dow, as it was up 1.1% over the final five trading days of 2025 and the first tow of 2026.  The Nasdaq and S&P fell just short.

Momentum carried into the midweek as the AI trade, especially chipmakers, pushed markets higher.  Later in the week, we saw a rotation from tech and into defense stocks as Trump floated a $1.5 trillion defense budget.

Friday's jobs report showed modest hiring and a slight dip in unemployment, good enough for investors to believe the Fed has some breathing room on rates heading into its January meeting.

^{Source: YCharts.com, January 10, 2026. Weekly performance is measured from Monday, January 5, to Friday, January 9. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.}

Jobs Report

The latest jobs report was softer than expected as payrolls rose by just 50k.  Well below 73k predicted.  Though unemployment edged down to 4.4%.

Zooming out, 2025 was a clear slowdown.  Job growth averages less than 50k a month, the weakest pace in over two decades.  A big reason, Federal jobs cuts, with 277k government positions eliminated this year.

This Week: Key Economic Data

Monday: Fed Presidents Tom Barkin (Richmond), Raphael Bostic (Atlanta), and John Williams (New York) speak.

Tuesday: NFIB Small Business Optimism Index. Consumer Price Index (CPI). New Home Sales* (Oct). Fed Presidents Alberto Musalem (St. Louis) and Barkin (Richmond) speak. Federal Budget Deficit.

Wednesday: Retail Sales* (Nov). Producer Price Index (PPI)* (Nov). Business Inventories* (Oct). Existing Home Sales. Federal Reserve’s Beige Book. Fed Presidents Neel Kashkari (Minneapolis), Bostic (Atlanta), and Williams (New York) speak. Fed Governor Stephen Miran speaks.

Thursday: Weekly Jobless Claims. Import Prices* (Nov). Fed Governor Michael Barr and Fed Presidents Jeff Schmid (Kansas City) and Barkin (Richmond) speak.

Friday: Industrial Production. Capacity Utilization. Fed Vice Chair Philip Jefferson and Fed President Barkin (Richmond) speak.

^{* indicates publication of a report delayed by the government shutdown in October and November}

^{Source: Investors Business Daily - Econoday economic calendar; January 9, 2025. The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to provide accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts are also subject to revision.}

This Week: Companies Reporting Earnings

Tuesday: JPMorgan Chase & Co. (JPM), The Bank of New York Mellon Corporation (BK), Delta Air Lines, Inc. (DAL)

Wednesday: Bank of America Corporation (BAC), Wells Fargo & Company (WFC), Citigroup Inc. (C)

Thursday: Morgan Stanley (MS), The Goldman Sachs Group, Inc. (GS), BlackRock (BLK), Infosys (INFY)

Friday: The PNC Financial Services Group, Inc. (PNC)

^{Source: Zacks, January 9, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice.}

"By failing to prepare, you are preparing to fail."

– Benjamin Franklin

As I mentioned in the opening, I am going to be a burr in the saddle of anyone who has not prepared their estate.

While Franklin was not referring to your estate plan, he is sharing his broader philosophy on preparation, foresight, and personal responsibility.

In the context of estate planning:

• If you don't prepare your documents, the state will decide who gets what.
• If you don't define your intentions (in writing...I am looking at you), courts and tax law will.
• If you don't plan for incapacity, someone else will.

Not All Retirement Income is Taxed the Same Way

Where the money comes from and how it was funded matters more than most people realize.  Pensions, IRAs, and Social Security each follow different rules and the wrong withdrawal strategy can quietly push you into a higher tax bracket.  

Actionable idea:  List every source of retirement income you have and note which are taxable, partially taxable, and tax-free.  Don't assume income is income.

Should I Retire in Georgia, Florida, or Tennessee? 

Yes, we get questions on geography is well.  My goal for all clients is to be able to retire wherever they want to.  But for the sake of this question asked last week, let me offer some ideas (besides my obvious bias to the greatest state in the Union.)

Florida:  No state income at all.  No state estate or inheritance tax.  So currently, you get to keep more and pass on more.  But it's hot and crowded.  And there's this guy, Florida Man, giant bugs, and even bigger reptiles. Cost of living varies on if you can see water or not, and homeowners' insurance may mean you will need a part-time job.

Tennessee:  Like Florida, no state income tax, including on your retirement income.  And generally lower property taxes, though state sales taxes are a bit higher than some states.  Tennessee has a reasonable cost of living and retirees find your dollar goes a little further.  Drawback?  Seeing that horrible orange "T" all year.

Georgia: Georgia has a state income tax but offers a sizeable exclusion for retirement income (ask your tax professional as it varies).  Georgia is most affordable overall, especially housing and daily expenses, compared to Florida, but maybe more than Tennessee.  Also, the University of Georgia football team recently had back-to-back National Championship seasons, almost guaranteeing you would be happier in their state.

Niterói Contemporary Art Museum

Rio de Janeiro, Brasil

Designed by Oscar Niemeyer, this futuristic designed building has bold curves and organic forms as it frames the Rio skyline.  Not just a museum, but an iconic piece of art in it's on right.

We always appreciate meeting new people and would love for you to pass this on to a friend or family member.  Especially someone who doesn't have their estate plan in order!

THANK YOU!