Pondering the predictive power of Super Bowl ads and what recent jobs, inflation and retail sales data is indicating.
While commiserating about the Pats’ loss (with all due deference to Seattle fans—your team played a great game!), my colleague and I were discussing the preponderance of AI-related Super Bowl ads. He mentioned that some were comparing the AI ad frenzy to the Super Bowl in 2000, also known as the “Dot-Com Super Bowl” when the likes of Pets.com and other dot-com startups spent millions on ads only to have the Nasdaq peak shortly thereafter and crash by close to 80%. There were also comparisons to the Super Bowl in 2022, when crypto companies were the leading ad buyers, including FTX, Coinbase and Crypto.com, only to have FTX reveal fraud and go bankrupt within the year (others survived to buy ads again this year). Cue some foreboding music…
It is interesting though that, right when AI ads seem everywhere, the stock market is taking a pause on some of the most-hyped AI companies and rotating back to more value-oriented companies and market segments like energy and industrials. Indeed, earlier this week the Dow Jones Industrial Average, which represents 30 established, dividend-paying, blue-chip companies and is typically considered a value-leaning index, surpassed the 50,000 level, though it did retreat below that threshold following a modest market sell-off.
Market conditions can often alter course quickly, sometimes in response to shocks like war or changes in fiscal or monetary policy, and sometimes just due to valuations and sentiment shifts. We prepare for these moments with your financial plan and a diversified portfolio. That portfolio is built not only with a variety of stocks and other assets but is also rebalanced to stay aligned with your long-term plan.
Is the AI trade over? Hardly, and momentary market changes are not likely to slow its implementation. Remember, the dot-com crash didn’t destroy the internet; by 2005, the web was more transformative than anything the 1999 evangelists imagined. Likewise, the bursting of the U.S. housing bubble contributed to the 2008 Great Financial Crisis, but it obviously didn’t eliminate homeownership.
This week’s market malaise might also be attributed to a data deluge that included jobs, inflation and retail sales data, which delivered a mixed picture. Nonfarm payrolls rose by 130,000 in January, double the 65,000 expected, such that the three-month average job growth rose from a loss of 17,000 to a gain of 73,000 in January, marking the strongest pace since February 2025. As a result, the unemployment rate unexpectedly fell from 4.4% to 4.3% in January, the lowest level since August 2025. Year-over-year, average hourly earnings increased 3.7% for the second consecutive month.
A number of labor market indicators at the start of the year suggested potential weakness, including a disappointing ADP report, a notable rise in layoffs and ongoing contraction in manufacturing employment. But the latest payrolls report showed labor market conditions—including wages—broadly strengthened in January. This offers welcome support for the U.S. consumer, who appeared to falter somewhat at year-end amid rising economic and policy uncertainty, as well as during the prolonged government shutdown.
Turning to inflation, the cost of goods and services rose at a slower annual rate than expected in January, up only 2.4% from a year ago, according to the Bureau of Labor Statistics. This report provided hope that the nagging U.S. inflation problem could be starting to ease. Key items such as food, gas and rent showed prices are cooling off, which will provide much needed relief for middle-class and moderate-income families.
Good news on jobs and inflation contrast with the weaker retail sales report from December, which showed flat growth and lackluster spending on anything other than sporting goods and some food and beverage sales. The lack of momentum heading into the new year with unseasonably cold and extreme winter weather is likely to exacerbate any lingering weakness in consumer activity. While still solid wage growth and tax refunds will likely provide some level of support, at the very least, increased volatility in consumer behavior month to month will complicate the market’s (and the Federal Reserve’s) ability to accurately assess the health of U.S. households.
Which brings me back to Super Bowl ads and the reveal of my top pick, a brand that always inspires my consumerism. It was Dunkin’ Donuts, of course! The spot featured a spoof of the treasured movie Good Will Hunting reimagined as a 90s sitcom with big stars from that era—Ben Affleck, Jennifer Anniston, Matt LeBlanc, Jason Alexander, Alfonso Ribeiro, Ted Danson and Jaleel White (plus Tom Brady)—making a cameo. Ah, the good old days!
Perhaps if we all just had a bit more caffeine, the AI takeover would seem less overwhelming. For now, cheers to a lovely long President’s Day weekend and a good cup of coffee to warm against the chill as we consider what the 2026 economic and market landscape and AI frenzy means for you and your plans. We look forward to catching up soon!
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Written by a human.