Ever have one of those weeks where the market just refuses to pick a lane? One day everything’s red, the next it’s roaring higher, and you’re left wondering what exactly is driving the bus. Well, strap in – because Thursday quietly set the stage for what could be a fascinating Friday session, and honestly, I’m kind of excited to see how it plays out.
We’ve got fresh inflation data dropping right in the middle of morning television, transportation stocks acting like they discovered rocket fuel, small caps flirting with record territory, and a few individual names that could steal the spotlight. Let’s unpack what’s worth watching when the opening bell rings.
What Friday’s Calendar Actually Means for Your Portfolio
Look, we’ve been drowning in employment numbers all week – claims, private payrolls, the whole circus. But Friday morning brings something potentially more important: the Federal Reserve’s favorite inflation gauge.
At 10 a.m. Eastern, we’ll get the Personal Consumption Expenditures price index – better known as PCE. This isn’t just another data point to glaze over. This is the metric the Fed watches most closely when deciding whether to cut rates again or slam on the brakes.
The consensus is looking for a 0.3% month-over-month increase. Sounds tame, right? But here’s the thing – any surprise here, especially to the upside, could completely change the conversation about how many rate cuts we’re getting in 2026. I’ve been doing this long enough to remember when these releases barely moved the needle. These days? They can swing the entire market 1-2% in minutes.
We’ll also get personal income and spending numbers at the same time. After the consumer’s been showing some cracks lately, these figures could tell us whether Americans are still opening their wallets or starting to pull back. In my experience, markets can forgive a lot, but they hate surprises when it comes to the consumer.
The Transportation Trade That’s Impossible to Ignore
Something fascinating has been happening this week that most people completely missed while obsessing over the Magnificent Seven.
The transportation sector is absolutely on fire.
I’m talking about the kind of move that makes you do a double-take. The State Street transportation ETF has climbed more than 4.5% in just four trading days. That’s not supposed to happen in a market that’s been chopping sideways.
But dig deeper and it gets even more interesting. The real action isn’t in the airlines or railroads – it’s in trucking and logistics. Names that most retail investors have never heard of are posting teenage percentage gains this week.
- One lesser-known trucking company is up over 18% this week alone
- Another just printed its best four-day stretch in years
- Even the old reliable names are participating with double-digit gains
Why does this matter? Because transportation stocks have historically been a fantastic leading indicator. When truckers are busy, it means goods are moving. When goods are moving, the economy is typically doing alright. Perhaps the most interesting aspect is that this move is happening while bond yields have been climbing – normally that would crush these names.
Call me old school, but when I see truckers outperforming tech giants, I pay attention. This isn’t just random noise – it’s the market telling us something about economic activity that the headline numbers might be missing.
Small Caps Are Knocking on Heaven’s Door
Remember when everyone declared small caps dead? Yeah, about that.
The Russell 2000 – that scrappy index of smaller companies that everyone loves to hate – is now less than half a percent from its October high. After being left for dead through most of 2024, small caps have suddenly woken up and decided they want some of this rally too.
What’s driving this? A few things seem to be converging:
- Growing belief that rates have peaked
- Rotation out of mega-cap tech into undervalued areas
- The perennial “January effect” trade starting early
- Simple mean reversion after years of underperformance
Whatever the reason, the move has been impressive. The Russell is now outperforming every major index this week by a factor of two. That’s not a rounding error – that’s real money rotating into an area of the market that’s been ignored for years.
The psychological level around that October high is going to be fascinating to watch. Break it, and you could see some serious fireworks as all those traders who have been short small caps scramble to cover. Hold it, and we might be looking at another fakeout. Either way, this is one of the more interesting technical setups heading into Friday.
Mining Stocks and the Copper Story Nobody’s Talking About
While everyone obsesses over AI data centers and semiconductor supply chains, a much more boring but potentially more important story has been developing in the basic materials sector.
Copper prices have been marching higher, and mining stocks are finally starting to respond.
We’re seeing major miners hit new highs, others approach significant resistance levels, and the entire complex showing relative strength that’s unusual for this late in the year. When you combine this with the transportation move we talked about earlier, it starts to paint a picture of an economy that’s perhaps more resilient than the pessimists would have you believe.
The copper demand story hasn’t changed: electrification, renewable energy, data centers, electric vehicles – all of it requires massive amounts of copper that simply doesn’t exist at current price levels. What has changed is the market’s willingness to price in this reality.
The copper market is facing a structural deficit that could last for years. The supply response takes a decade, but demand is growing right now.
– Commodity analyst observation that’s been proven right more often than not
These moves rarely happen in isolation. When industrial metals start outperforming while transportation stocks surge, it’s usually the market’s way of saying “hey, maybe this economic soft landing everyone keeps talking about is actually happening.”
Individual Names That Could Move the Needle
Beyond the sector moves, a couple individual situations deserve attention.
First, there’s a popular fintech name that just announced a secondary stock offering after hours. The stock had been one of the best performers of 2024 – up over 90% year-to-date – but existing shareholders clearly weren’t thrilled about the dilution. The after-hours reaction was swift and negative.
These situations are always interesting because they create a conflict between the company’s need for capital and shareholders’ desire for undiluted ownership. The company clearly sees opportunities to deploy capital at attractive rates, but the market’s initial reaction suggests investors wanted to keep all those gains for themselves.
Friday morning will tell us whether this is a buying opportunity or the beginning of something more concerning. My experience with these offerings is that the initial selling is often overdone, but each situation is unique.
Then there’s the retail name that reports earnings Friday morning – a company that’s been one of the more volatile stories in consumer discretionary. After being left for dead earlier this year, the stock has staged an impressive comeback, up over 60% from its recent lows.
The question everyone will be asking: is this a legitimate turnaround or just another dead cat bounce? Retail earnings have been a minefield lately, with companies either crushing numbers because they’re taking share or missing badly because the consumer is tapped out. There rarely seems to be any middle ground anymore.
Putting It All Together
So here’s what I’m watching when I fire up the screens Friday morning:
- How markets react to the PCE number – especially if it’s hotter than expected
- Whether transportation stocks can keep their momentum going
- If small caps finally break that October high
- The mining complex and what it might be telling us about global growth
- These two individual earnings/offerings and whether they trigger broader sector moves
The honest truth? Markets have been schizophrenic lately. One day rate cuts are the best thing ever, the next day strong economic data is somehow bad because it means fewer cuts. But beneath all the noise, some pretty interesting things are happening in areas that typically lead the market.
Maybe the most important thing to remember is that markets climb walls of worry. The fact that transportation stocks are strong while yields are rising, that small caps are outperforming while everyone’s worried about recession, that industrial metals are hitting highs while China’s supposedly collapsing – these aren’t the actions of a market that’s rolling over.
They’re the actions of a market that’s trying to discount something better than the consensus expects.
Or maybe it’s all just noise and we’ll gap down Monday and laugh about this. That’s the beauty of this game – we never really know until after it happens. But Friday has the potential to be one of those sessions where the character of this market finally reveals itself.
Either way, I’ll be watching. You probably should be too.
