The Market Update with EP Wealth Advisors Managing Director, Investments -
Adam Phillips, CFA^®, CAIA, CFP^®

Often quoted in major national media, Adam is a Chartered Financial Analyst (CFA^®), a CERTIFIED FINANCIAL PLANNER™ (CFP^®), and has been included on the Forbes NextGen Best-in-State Wealth Advisors 2019 list. He is a member of the CFA Society of Los Angeles and the CFA Institute. Adam helps establish asset allocation strategy as a member of the EP Wealth Investment Committee, which supports all EP Wealth Advisors and their clients. The Committee’s top-down approach to portfolio construction begins with an outlook on the economy’s likely direction, followed by the implications for different economic sectors and asset classes. This culminates in strategic selection of the individual stocks, bonds, mutual funds or other investments deemed most appropriate for each individual client’s portfolio.

Market Update: A Volatile Start to 2026 

Markets Open the New Year Steady 

As we begin 2026, many investors were hoping for a quiet start to the year. Instead, geopolitical developments out of Venezuela quickly reminded markets that global events don’t pause for the holidays. Despite the headlines, market reaction has been notably calm. As of Monday morning, major indexes are trading higher, with broad market measures showing solid gains. 

This positive response suggests that investors are taking a measured view of the situation rather than reacting emotionally. While headlines can feel unsettling, markets often focus more on economic impact than uncertainty alone. 

Why Venezuela’s Impact Is Limited 

While the situation in Venezuela continues to evolve, the country’s role in the global economy today is far smaller than it was several decades ago. In the 1970s, Venezuela accounted for roughly 1% of global GDP and supplied a meaningful share of the world’s oil production. Today, its economic footprint is a fraction of that size, representing only a small share of global output. 

Although Venezuela holds some of the world’s largest oil reserves, production capacity remains limited. Any meaningful increase in output would take significant time and investment, making near-term disruption to global energy markets unlikely. For now, investors appear comfortable waiting for clearer facts before drawing conclusions. 

Broader Global Considerations 

Beyond Venezuela, markets are also paying attention to shifting geopolitical dynamics more broadly. Discussions around changing spheres of influence and global trade relationships continue to circulate. These developments are important to monitor, but at this stage, much remains uncertain and speculative. 

Focus Turns to the Jobs Report 

As attention shifts back to economic fundamentals, the key data point this week is the monthly jobs report, scheduled for release on Friday. This report has taken on added importance as both investors and the Federal Reserve closely monitor the health of the labor market. 

Recent data has shown signs of slowing job growth. Over the past six months, average monthly job creation has been significantly lower than pre-pandemic levels. Prior to COVID, the economy was adding roughly 200,000 jobs per month. Today, that figure is meaningfully reduced, suggesting a cooling labor market. 

What’s Driving the Labor Market Slowdown 

Part of the slowdown may be driven by supply-side factors. A growing number of workers are retiring, and fewer individuals are entering the workforce to replace them. Immigration has also slowed, reducing the overall pool of available workers. 

On the demand side, businesses remain cautious. Some companies are reassessing hiring plans as they invest in technology and artificial intelligence, while others are waiting for greater clarity around trade policy and tariffs. These factors combined have contributed to a more restrained hiring environment. 

Why This Week Matters 

Friday’s jobs report will be an important signal for both markets and policymakers. It will help clarify whether recent softness is temporary or part of a broader trend. The data will also play a role in shaping the Federal Reserve’s outlook as it balances economic growth with inflation concerns. 

As always, we continue to monitor developments closely and assess what they mean for long-term investors. While headlines may fluctuate, maintaining perspective remains essential. 

If you have questions about how current events may affect your financial plan, please don’t hesitate to reach out to your financial advisor. 

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Video Summary: 

Adam Phillips:

Welcome back and Happy New Year. I am sure many of us were hoping for a quiet start to 2026. Unfortunately, we got the news out of Venezuela yesterday, and so it appears that the holiday break is now over. We're back into it. Let's just take a look at how markets are responding today. We're recording this on Monday morning. 

The markets broadly are positive, and I think that's really important. If you look at it, we don't like to focus too much on the Dow. It's just 30 stocks. It's not indicative of the broad economy, but the Dow is up close to 800 points as we're recording this, the S&P 500 is up close to 1%, so the markets aren't really paying much attention to what's going on in Venezuela right now. 

For a couple of reasons. Number one, this is still a fluid situation. There's just so much that we don't know. But if we were to focus on the facts, there are a few things that I would highlight. Number one, Venezuela today is a much different country than it was decades ago in the 1970s. This is a country that accounted for 1% of global GDP, and it produced about three and a half billion barrels of oil per day. 

So, they provided about 8% of the global oil supply. A lot has changed. So today they account for about one 10th of global GDP, so a very small part of the global economy, and when it comes to oil production, they only account for about 1%. Now, at the same time, they also have the world's largest oil reserves, but they just aren't producing it. 

That is not going to come online. Overnight, this will take time. And so we are currently waiting to see how this plays out, what happens with new leadership in Venezuela, what happens with respect to oil, and even beyond Venezuela and Latin America. There's a lot of talk right now about how the rules of engagement are changing. 

There's been talk about spheres of influence in the Monroe Doctrine; is Greenland next? These are things that we ultimately do not know, but we'll be watching closely. Now, as we get back to our regular programming, there's one thing that I would highlight this week that we'll be keeping an eye on. 

That's the jobs report. So this comes out on Friday. It's the first Friday of every month. Over the last couple of months, this has been delayed. That was largely as a result of the government shutdown. Now that everything is back up and running, we are going to get this. New release on time, so that's great. 

This is really important because we are still very focused on the health of the economy, on the health of the labor market. We're focused on it. We know the Fed is focused on it. We've seen some material softening here. In fact, on a six-month basis. Rolling basis. We've seen that the average number of jobs that have been added to the economy is just under 20,000. 

That's per month, and this is well short of where it was before COVID. In the five years leading up to COVID, we're seeing about 200,000 jobs being added to the economy each month. So things are definitely slowing down. I think part of the debate is still, is this being driven by a lack of supply, and are we seeing fewer workers because so many are currently retiring? 

There are currently two point, two and a half people exiting the workforce and retiring for everyone that is entering the workforce. So that could be impacting the supply. And then there's also the fact that immigration is slowing down. We've actually seen the lowest immigration in about a hundred years. 

And so is this providing less supply of workers, and then obviously on the demand side. There is that obvious fear that companies are focused more on AI, or they're waiting to see what happens with respect to tariffs and how things ultimately play out. So they're a little bit cautious about hiring in this environment. 

So I think that debate is going to continue, but for now, we're keeping a close eye on the health of the jobs market. I think Friday's report will be crucial and will help inform our view as well as the feds. So I'll leave it there for right now. I'll look forward to catching up next week. If you have any questions, as always, please don't hesitate to reach out to your financial advisor.