Two Reasons Markets Have Been So Resilient YTD

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What’s in Today’s Report:

  • Two Reasons Markets Have Been So Resilient YTD
  • Weekly Market Preview: Focus on the Fed (Will They Hint at Rate Cuts Later in the Year?)
  • Weekly Economic Cheat Sheet: More Growth and Inflation Updates

Futures are modestly weaker but have rebounded from steep overnight declines, as more political/policy volatility is weighing on futures.

Government shutdown risks spiked over the weekend following another incident with ICE, while separately, President Trump threatened 100% tariffs on Canada.

Economically, the only report was German Ifo Business Expectations and it slightly missed estimates.

Today focus will be on Washington via rising government shutdown risks and the tariff threats on Canada.  Any headlines that make a shutdown seem more likely or that tariff threats will actually go through will weigh on markets, while deescalation on both will help fuel a rebound.

Outside of Washington political volatility, there is one economic report today, Durable Goods (E: 3.1%) and some earnings, STLD ($1.72), BKR ($0.67), NUE ($1.82), but they shouldn’t move markets.

 

Why YTD Sector Performance Implies Inflation Risks

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What’s in Today’s Report:

  • Why YTD Sector Performance Implies Inflation Risks

Futures are little changed on mixed tech news and as the Bank of Japan decision met expectations.

Tech earnings/news was mixed as Intel missed (INTC down 13% pre-market) but a positive Bloomberg article on Nvidia (NVDA) chip sales to China is offsetting the INTC results.

The Bank of Japan held rates steady but signaled more hikes are coming, as expected (and that kept JGB’s calm).

Focus today will be on economic data and specifically the Flash Manufacturing PMI (E: 52.0) and Flash Services PMI (E: 52.8), which are the first national data points for January.  Stability in the data will be welcomed by markets as another reminder of the Goldilocks economy (which is stock positive).

We also get Consumer Sentiment (E: 54.0) and some earnings reports (SLB ($0.74), ERIC ($0.23), BAH ($1.26)) but they shouldn’t move markets.

 

What’s Next from a Policy Standpoint

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What’s in Today’s Report:

  • What’s Next from a Policy Standpoint
  • Monthly Bitcoin Update

Futures are moderately higher on continued positive momentum from the “deal” announced on Greenland by President Trump on Wednesday afternoon.

There were no new geopolitical headlines overnight and that’s allowing stocks to extend the rebound as markets celebrate no new tariffs and deescalation on Greenland. Today markets will want to see no backtracking on the Greenland “deal” and continued calm in JGB yields and if we get both, stocks should hold these early gains.

Looking at the calendar, there is some notable economic data via Jobless Claims (E: 205K) and two delayed reports from the government shutdown: Final Q3 GDP (E: 4.3%) and Nov. Core PCE Price Inde (E: 0.2% m/m, 2.8% y/y).  However, barring a major surprise, none of those numbers should move markets.

On earnings, they’ve taken a back seat given all the geo-political drama but the season is heating up and some results we’re watching today include: PG ($1.87), GE ($1.44), FCX ($0.28), INTC (-$0.02), ABT ($1.50), ISRG ($1.83), COF ($4.12), AA ($0.84).

 

Why “JGBs” and a “Run-Hot” Economy Matter to Your Clients

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What’s in Today’s Report:

  • Why a Spike in Japanese Bond Yields Hit Stocks
  • Implications of the Administration’s Policies: A Run-Hot Economy (and What Might Come Next)

Stock futures bounced overnight amid stabilizing global bond yields as traders digested Tuesday’s volatile start to the short trading week before Trump’s speech in Davos.

Economically, the U.K.’s December CPI report was “warm” with the headline rising +0.2% to 3.4% vs. (E) 3.3% which saw yields come off their overnight lows in pre-market trading.

There are no economic reports due to be released today and no Fed officials are scheduled to speak. However, President Trump is scheduled to deliver an address at the World Economic Forum in Davos at 8:30 a.m. ET, and any commentary on Greenland could roil markets in what has already been a volatile week.

The Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET and a 20-Yr Bond auction at 1:00 p.m. ET. Yesterday’s Treasury auctions saw weak demand across durations which added upside pressure to bond yields, and if we see more of the same in today’s auctions, rising yields could reignite volatility.

Finally, earnings season remains in full swing with a handful of noteworthy companies reporting today including: JNJ ($2.49), SCHW ($1.37), and KMI ($0.36).

 

What Greenland Headlines Mean for Markets

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What’s in Today’s Report:

  • What the Greenland Headlines Mean for Markets
  • Weekly Economic Outlook – Core PCE in Focus

Global markets are “risk-off” thanks to geopolitical tensions between the U.S. and Europe surrounding Greenland and a sharp rise in bond yields due to Japanese fiscal worries.

Economically, Germany’s ZEW Survey topped estimates with Economic Sentiment firming to 59.6 vs. (E) 50.0 but the data is being overshadowed by the sharp rise in JGB yields and geopolitical turmoil.

There are no economic reports today, however, the Treasury will hold auctions for 3-Month and 6-Month Bills at 11:30 a.m.

ET and 6-Week and 52-Week Bills at 1:00 p.m. ET. Strong demand (dovish) should help stocks stabilize as we start the week.

There are no Fed officials scheduled to speak today which will leave traders watching earnings closely with FITB ($1.01), MMM ($1.82), DHI ($1.96), USB ($1.19), NFLX ($0.55), IBKR ($0.51), and UAL ($2.98) all reporting Q4 results today.

 

January Market Multiple Table Chart

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What’s in Today’s Report:

  • Market Multiple Table Chart

Futures are modestly higher mostly on momentum from Thursday’s rally and following a quiet night that was devoid of any material earnings or economic data.

Oil is higher by 1% on reports the U.S. is moving military assets back into the Mid-East, implying the chances of a strike on Iran did not decrease as much as thought.

Today there are two economic reports, Industrial Production (E: 0.1%) and Housing Market Index (E: 40) as well as two Fed speakers: Bowman (11:00 a.m. ET) and Jefferson (3:30 p.m. ET), but barring a major surprise, none of that should move markets ahead of the long weekend.

Instead, focus will stay on Washington and any reports, headlines or social media posts that 1) Imply more attacks on the Fed or 2) Hint at military action in Iran, Greenland, Mexico, etc. will weigh on stocks.

Finally, on the earnings front, the week has been mostly focused on bank results and that continues this morning with several regional reports: PNC ($4.23), STT ($2.82), RF ($0.61), MTB ($4.44).

January Market Multiple Table (Rising Negative Pressure)

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What’s in Today’s Report:

  • January Market Multiple Table (Rising Negative Pressure on Market Influences)

Futures are modestly higher on dual de-escalation of recent Fed attacks and geopolitical tensions overnight.

President Trump stated last night he didn’t plan on firing Fed Chair Powell and downplayed the chances of a strike on Iran, de-escalating two negative market influences.

Today focus will be on economic data and earnings.  Starting with data, the key reports today include Jobless Claims (E: 212K), Philly Fed (E: -3.5) and Empire Manufacturing (E: 1.0) and stable readings that meet expectations will be the best-case scenario for stocks.  On the Fed front, there are three speakers today, Bostic (8:35 a.m. ET), Barr (9:15 a.m. ET) and Barkin (12:40 p.m. ET) and the more dovish they are, the better for markets.

Finally, turning to earnings, TSM ($2.82) already posted blow out numbers and that’s helping tech, but other reports we’re watching today include GS ($11.77), BLK ($12.41), MS ($2.41) and JBHT ($1.79).

 

Implications of Powell’s Criminal Investigation

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What’s in Today’s Report:

  • Implications of Powell’s Criminal Investigation
  • CPI Data Takeaways

Futures are moderately lower due to ongoing geopolitical angst and growing concerns about Japan’s fiscal situation ahead of snap elections announced for February.

Economically, Chinese trade data was strong overnight with Imports +5.7% vs. (E) -0.1% and Exports +6.6% vs. (E) +3.0%.

Today, investors will get a look at some delayed economic data from Q4’25 including PPI (E: 2.7% y/y), Core PPI (E: 2.6%), Retail Sales (E: +0.2%), and Existing Home Sales (E: 4.23 million). Investors continued to look for strong, but not “hot” growth numbers and “cool” inflation data.

There are multiple Fed officials scheduled to speak today including: Paulson (9:50 a.m. ET), Miran (10:00 a.m. ET), Bostic (12:00 p.m. ET), Kashkari (12:00 p.m. ET), and Williams (2:10 p.m. ET) with markets likely most focused on “Fed Independence” and any shifts in tone regarding 2026 rate cuts.

Finally, earnings season is continuing to ramp up with reports due from WFC ($1.66), C ($1.65), and BAC ($0.95) today.

 

Cutting Through the Policy Headline “Noise”

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What’s in Today’s Report:

  • Market Implications of Recent Policy Headlines
  • A Closer Look at Credit Card Limits and Defense Company Shareholder Return Policies

Futures are lower thanks to ongoing geopolitical tensions overseas and “Fed independence” concerns ahead of a key U.S. inflation report due ahead of the bell as well as the unofficial start of earnings season today.

Economically, the NFIB Small Business Optimism Index firmed by 0.5 points to 99.5 vs. (E) 99.4 in December which is being viewed as a modest positive this morning.

Starting with the critical pre-market catalyst, investors will be focused on the release of December CPI (E: 0.3% m/m, 2.6% y/y) and the all-important Core CPI figure (E: 0.3% m/m, 2.7% y/y). An in-line to cooler-than-expected print would be ideal for the stock market rally to continue.

Shortly after the open, the delayed November New Home Sales data (E: 714K) will be released but is not likely to move markets as the report is dated at this point.

Looking into the middle of the day, the Treasury will hold a 6-Week Bill auction at 11:30 a.m. ET and a 30-Yr Bond auction at 1:00 p.m. ET. Strong auction results yesterday offered the market a modest tailwind, helping the S&P 500 end positive, so investors will be looking for more strong demand in today’s auctions.

With the Fed in focus amid the Trump-Powell drama from the weekend, the two Fed officials scheduled to speak today: Musalem (10:00 a.m. ET) and Barkin (4:00 p.m. ET) will likely be closely watched for any commentary regarding “Fed Independence.”

Finally, today marks the unofficial start to Q4’25 earnings season with quarterly results due from JPM ($5.01), DAL ($1.53), and BK ($1.97) and with rather optimistic earnings/revenue estimates for 2026, investors will be looking for strong results to support the equity rally.

 

How Much Uncertainty Can Markets Withstand?

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What’s in Today’s Report:

  • How Much Uncertainty Can Markets Withstand?
  • Weekly Market Preview: Can Treasury Yields Remain Stable? (CPI, Possible SCOTUS decision, Fed concerns)
  • Weekly Economic Cheat Sheet: Inflation in Focus This Week

Futures are moderately lower following the announcement of a federal criminal investigation into Fed Chair Powell.

On Sunday night the government confirmed it had opened a criminal investigation focused on Fed Chair Powell and the construction of the Fed’s new headquarters.  The net impact of the news is to further pressure Fed independence and that is why futures are declining moderately.

There were no notable economic reports overnight.

Today there are no economic reports so focus will be on Washington, first via more details of the criminal investigation into Fed Chair Powell and then on a potential Supreme Court IEEPA tariff decision.  Regarding the Fed, any news that further raises concerns about the loss of Fed independence will send Treasury yields higher and stocks lower.

There are also three Fed speakers today, Barkin (8:00 a.m. ET), Bostic (12:30 a.m. ET) and Williams (6:00 p.m. ET) and any dovish commentary from the three should help support markets (Williams is the most important speaker today).