This Week’s Takeaways:
- Retirees have flexibility on when to take required minimum distributions each year, and while taking them early reduces the risk of forgetting and can help with tax planning, waiting may allow more tax-deferred growth, so the right choice depends on individual circumstances.
- A stronger-than-expected jobs report points to a stabilizing labor market, reducing the urgency for further Fed rate cuts despite lingering pockets of weakness.
- Mortgage delinquencies have climbed most sharply in lower-income communities and areas with worsening labor markets or declining home prices, even though overall national delinquency rates remain near long-run lows.
- AI adoption is creating both quantifiable winners — companies showing real economic gains from AI — and losers, particularly in traditional software sectors disrupted by automation tools, even as broader markets remain elevated.
- Bonds should do well this year, earning near their starting yields. Investors should focus on intermediate-term bonds to balance inflation and policy risks and avoid taking too much credit risk. International bonds can help combat a falling dollar.
- Things to Do This Weekend in Boston
Retirees: Should You Take RMDs Early in the Year or Wait? by Morningstar
Retirees must take required minimum distributions (RMDs) from certain tax-deferred retirement accounts each year once they reach the RMD age, and while the IRS sets the annual amount and deadline, retirees have flexibility about when during the year they complete the withdrawal. Taking RMDs early can help ensure they aren’t overlooked and may aid in tax planning and cash flow, but waiting can allow investments more time to grow tax-deferred and align distributions with year-end planning. The best timing depends on individual financial circumstances, and the article discusses the pros and cons of different approaches for fulfilling these IRS requirements.
January Employment: Strong Start Out of the Gate by Wells Fargo
January’s employment report came in stronger than expected, with nonfarm payrolls rising 130K and the unemployment rate falling to 4.3%, suggesting the labor market has stabilized rather than deteriorated. While annual benchmark revisions showed weaker job growth in 2025 overall and hiring remains concentrated in sectors like healthcare, recent monthly trends indicate some firming in labor demand and steady wage growth. The data strengthen the case for the Federal Reserve to hold rates steady, as the labor market appears closer to balance than previously thought, making additional rate cuts less likely in the near term.
Where Are Mortgage Delinquencies Rising the Most? by Federal Reserve Bank of New York
Mortgage delinquency rates in the United States, while still low by historical standards, have been rising gradually, particularly in lower-income areas and regions with weakening labor markets or falling house prices. Analysis of credit data shows that borrowers in the lowest-income ZIP codes are experiencing much larger increases in serious delinquencies compared with higher-income areas, and local unemployment trends are strongly linked to these deteriorations in mortgage performance. Despite generally tight lending standards and high credit scores on newly originated mortgages helping overall performance, these localized stress patterns highlight growing economic disparities across regions and income groups.
We’re learning more about who’s winning and losing in the AI revolution 🤖 by TKer
Recent analysis suggests that while AI adoption is accelerating, clear stock-market leadership from the AI revolution has been hard to pinpoint, with only a small portion of companies reporting measurable AI-driven returns. Data indicate that firms quantifying economic gains from AI tend to outperform the broader market, while traditional software stocks — vulnerable to disruption from AI tools — have faced significant selling pressure.
Fixed Income Market: Anchor in a Stormy Sea by Charles Schwab Asset Management
Bond market volatility has remained low, despite economic and policy uncertainty. Base case is fixed income will do well this year, earning near their starting yields. Investors should focus on intermediate-term bonds to balance inflation and policy risks and avoid taking too much credit risk. International bonds can help combat a falling dollar.
