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Market Update from CIO Lan Cai, CFA – January 2026

MARKETS

  • International markets continued to outperform U.S. equity markets and small cap performed better than large cap stocks during the month.  The global equity index (MSCI ACWI IMI) increased by +2.96% in January and YTD. The S&P 500, which tracks large cap U.S. stocks, increased by +1.45% in January and YTD. The Russell 2000 Index, which tracks domestic small cap stocks increased by +5.35% in January and YTD. The International developed equity index (MSCI EAFE) increased by +5.22% in January and YTD. The emerging markets index (MSCI EM) increased by +8.85% in January and YTD.

  • In January, bond yields increased across maturities; the 30-year U.S. Treasury bond yield increased by 3 bps to 4.87%, the 10-year yield increased by 8 bps to 4.26%, and the 2-year yield increased by 5 bps to 3.52%.

  • The Barclays U.S. Aggregate Index, which is a measure of U.S. Bond prices, increased by +0.11% in January and YTD.


ECONOMIC AND GEOPOLITICAL HEADLINES

  • U.S. gross domestic product (GDP) in the third quarter of 2025 increased by 4.4%, according to the “updated” estimate released by the Bureau of Economic Analysis.

  • The January Services PMI (formerly Non-Manufacturing Purchasing Managers Index)  was 53.80% similar to December. The January Manufacturing PMI increased to 52.60% from 47.90% in December.

  • January non-farm employment increased by 130,000 jobs, and the unemployment rate was little changed at 4.3%, as reported by the Bureau of Labor Statistics on February 11th, 2026. In January employment increased in health care, social assistance, and construction. Average Hourly Earnings (wages) increased by 3.7% year-over-year in January.


PERFORMANCE UPDATES

  • The Equity Fund increased by +3.41% in January and YTD. The Bond Fund increased by +0.04% in January and YTD. The Stable Value Fund was up +0.09% for January and YTD. The Northern Trust World Selection Index Fund increased by +2.10% in January and YTD.

  • The Balanced Fund increased by +1.77% in January and YTD. The Target Annuitization Date TAD 2025; TAD 2030; TAD 2035; TAD 2040; TAD 2045; TAD 2050; TAD 2055; TAD 2060; and TAD 2065 returns were +0.77%, +1.40%, +1.91%, +2.23%, +2.49%, +2.73%, +2.91%, +2.90%, and +2.87% respectively for January and YTD.