General Market News

Chinese export salespeople report 2025 was their hardest year despite China achieving a record $1.2 trillion trade surplus, as U.S. orders plunged by a third following Trump tariffs and companies shifted to lower-income markets. The shift to new markets in Latin America, Africa, and Southeast Asia resulted in smaller, less profitable orders requiring longer hours and greater stress for workers. This suggests China's export diversification success may be difficult to sustain and highlights risks of over-reliance on foreign demand rather than domestic consumption.

• New market orders are smaller and less lucrative than U.S. sales, with profits at Chinese industrial firms falling 13.1% year-on-year in November, leading to lower commissions and pay for salespeople
• Workers face significantly increased labor intensity, with one sales rep earning just $2 commission after months of client communication, while constant availability is required to serve global time zones
• Economists warn China's export-driven strategy is unsustainable, as weak domestic consumption forces producers to compete overseas against each other, bringing revenue but eroding profits and perpetuating deflation

Private credit funds continue to attract billions in capital despite mounting warnings about loose lending standards and borrower stress. Major fundraises include TPG's $6 billion Credit Solutions fund and Neuberger Berman's $7.3 billion private debt fund, signaling sustained investor appetite even after high-profile defaults like First Brands Group sparked concerns from industry leaders including JPMorgan CEO Jamie Dimon.

• Around 15% of private credit borrowers are no longer generating sufficient cash to fully service interest payments as high interest rates increase borrowing costs
• Private credit has evolved from a niche alternative into a multi-trillion-dollar market and core allocation for institutional investors as traditional banks retreat due to post-2008 regulatory constraints
• Asia's private credit market remains comparatively conservative with lower leverage and stronger covenants compared to the U.S. and Europe, where competition has driven looser lending structures

President Trump criticized the New York Stock Exchange's plans to expand to Dallas, calling it 'unbelievably bad' for New York and a failure of city leadership. Dallas Mayor Eric Johnson welcomed the move, calling it 'inevitable' and citing New York's hostile business environment. The expansion reflects broader migration patterns, with Texas gaining over 361,000 New York residents and $21 billion in taxable income between 2012 and 2022.

• Between 2012 and 2022, New York lost more than 361,000 residents to Texas, representing roughly $21 billion in taxable income, while over 380,000 New Yorkers moved to Florida, taking an estimated $37 billion with them
• The NYSE Dallas expansion will operate as a fully electronic equities exchange intended to serve companies in the South and Southwest, with the separate Texas Stock Exchange also planning to begin trading in 2026
• Dallas Mayor Eric Johnson attributes the financial sector migration to New York's new mayor being 'openly hostile towards the business community' and pushing for higher taxes, while positioning Dallas as 'America's first Sanctuary City from Socialism'

The EU holds approximately $8 trillion in US assets, giving it significant financial leverage as Trump threatens new tariffs on NATO allies over his Greenland acquisition push. Deutsche Bank warns that Europe could weaponize capital markets by withdrawing investments or restricting US companies' access to EU liquidity, potentially causing more disruption than traditional trade wars. This financial interdependence makes the US vulnerable despite its military and economic strength, as it relies on foreign creditors to fund large external deficits.

• The EU is America's largest foreign creditor with holdings in US bonds and equities nearly double those of the rest of the world combined
• Trump has signaled approximately 10% tariffs on eight NATO allies beginning February 1st, linked to his controversial Greenland acquisition efforts
• Experts warn that a shift from trade tariffs to capital market weaponization could trigger volatility in global currencies, equities, and bonds, with potential ripple effects across Wall Street and international markets

Federal Reserve Chair Jerome Powell will attend Supreme Court oral arguments on Wednesday as justices weigh whether President Trump can fire Fed Governor Lisa Cook, marking a rare public appearance that underscores the institutional stakes. Trump fired Cook in August 2025 over alleged pre-appointment mortgage fraud, but lower courts have blocked the removal. The case threatens to end 112 years of unbroken Fed independence by testing whether presidents can remove governors for conduct before taking office.

• Powell's attendance is highly unusual for a Fed chair and comes days after the Trump administration issued subpoenas threatening criminal investigation into Powell himself over a headquarters renovation.
• Cook, appointed by Biden in 2023 to a 14-year term, denies wrongdoing and faces no criminal charges; her lawyers argue the allegations are 'manufactured' pretexts for policy disagreements.
• No president has ever removed a sitting Fed governor in the institution's 112-year history; a ruling for Trump could permanently reshape the Fed's relationship with the White House and trigger economic instability.

The International Monetary Fund warned in its January 19, 2026 World Economic Outlook that overly optimistic expectations about AI-driven productivity gains pose a risk to the global economy. If AI fails to deliver on anticipated productivity advances, it could trigger a market correction starting with AI-linked companies and spreading to other sectors, potentially causing a broader economic downturn.

• IMF Chief Economist expressed concern about potential market correction if AI productivity and profitability expectations are not realized, though current market conditions have not reached 'dot-com bubble' levels of excess
• The report identified an upside scenario where faster AI adoption could deliver sustainable growth through strong productivity gains and increased business dynamism, or through easing of trade tensions
• Over 60% of American adults used dedicated AI platforms in 2025, with Generation Z and heavy users increasingly turning to AI as their primary interface for personal tasks, potentially displacing traditional search habits

Federal Reserve Chairman Jerome Powell plans to attend Supreme Court oral arguments on Wednesday regarding President Donald Trump's attempt to fire Fed Governor Lisa Cook. The case challenges the extent of presidential power to remove Federal Reserve governors.

• Powell's attendance signals the Fed's institutional interest in defending the independence of its leadership structure
• The case centers on Trump's authority to fire Cook, a sitting Fed governor, testing constitutional limits on presidential removal power
• The Supreme Court's decision could have significant implications for Federal Reserve independence and governance

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U.S. President Donald Trump will attend the World Economic Forum in Davos in person for the first time since 2020, bringing the largest U.S. delegation ever. However, notable absences include Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, and the Danish government, which boycotted due to tensions over Greenland. The event runs Monday to Friday with nearly 3,000 leaders expected, though focus is shifting more toward who attends rather than the agenda topics.

• Trump's delegation includes Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and adviser Jared Kushner; he will address the forum on Wednesday
• Denmark declined to attend as tensions escalate over Trump's attempt to annex Greenland, with the U.S. threatening tariffs against European countries
• Six of the G7 nations will send representatives in a 'historic' move, while WEF expects a record 400 political leaders, 850 CEOs, and 100 tech pioneers including Nvidia's Jensen Huang and Microsoft's Satya Nadella

Johns Hopkins economist Steve Hanke warns that the Federal Reserve has pivoted from fighting inflation to easing monetary policy under political pressure, creating asset bubbles across stocks and commodities. With CPI inflation at 2.7% (above the Fed's 2% target), the central bank halted quantitative tightening in December and began expanding its balance sheet by purchasing $40 billion in Treasury bills. Hanke argues this shift toward monetizing deficits will keep prices elevated and fuel further asset inflation.

• The Fed reversed course in December, halting quantitative tightening and beginning to expand its balance sheet again, with plans to buy $40 billion in Treasury bills that Hanke characterizes as 'monetizing the deficit'
• Consumer price inflation remains stuck at 2.7%, well above the Fed's 2% target, yet monetary policy is loosening rather than tightening
• Hard assets including gold, silver, platinum, and copper have hit record highs, with Hanke predicting continued price increases in commodities and warning of 'definitely a bubble in the stock market'

A study by the Kiel Institute for the World Economy found that Trump administration tariffs on foreign goods are primarily absorbed by American importers and consumers rather than foreign exporters. The research analyzed 25 million transactions covering $4 trillion in trade, revealing that US businesses and households bear approximately 96% of the added tariff costs, contradicting claims that foreign countries pay these duties.

• American importers pay nearly 96% of tariff costs while foreign exporters maintain stable pricing and reduce shipment volumes instead of lowering prices
• Targeted countries like Brazil (50% tariff) and India (25-50% tariff) kept export prices unchanged, shifting the burden entirely to US buyers
• Tariffs generated approximately $200 billion in revenue but function as a consumption tax on US businesses and households rather than a tool forcing concessions from trading partners

U.S. stock index futures plunged on January 19, 2026, after President Trump threatened to impose 25% tariffs on eight European nations opposing the U.S. purchase of Greenland. The Nasdaq 100 fell 1.57%, the S&P 500 dropped 1.14%, and the Dow declined 0.89%, with the tech-heavy Nasdaq erasing all of its 2026 gains. European nations are reportedly considering retaliatory measures, raising fears of a broader trade war.

• E-mini Nasdaq-100 futures dropped 403 points to 25,286, breaking below key support levels including the 50-day moving average and erasing all year-to-date gains
• E-mini S&P 500 futures fell 79.25 points to 6,897.50, gapping lower through trend line support and testing the 50-day moving average at 6,892.07
• European finance officials, including France's Roland Lescure, indicated the EU 'must be prepared' to use anti-coercion mechanisms and retaliatory tariffs against the U.S.

Dow Jones Index futures fell over 300 points on Monday as investors await multiple catalysts this week, including escalating US-Europe trade tensions, the World Economic Forum in Davos, and corporate earnings reports. The decline follows President Trump's announcement of tariffs on European countries, with the EU considering €93 billion in retaliatory measures.

• Trump announced a 10% tariff on European countries supporting Denmark over Greenland, rising to 25% until the US 'completes its purchase' of Greenland, prompting EU consideration of €93 billion in counter-tariffs and potential anti-coercive investment restrictions on US tech companies
• Key earnings releases this week include Paramount Global, GE Aerospace, Johnson & Johnson, 3M, Intel, and Procter & Gamble, while Trump is expected to announce major housing and credit card policy changes at the World Economic Forum
• The index has dropped nearly 2% from its 2026 high but remains above key technical levels (50-day and 100-day EMAs), with analysts targeting $50,000 as the next resistance level

The International Monetary Fund raised its 2026 global growth forecast to 3.3% from 3.1%, driven by AI investment and business activity. However, the IMF warns that concentrated AI spending creates financial vulnerabilities, as market corrections could occur if expected productivity gains fail to materialize. Trade tensions and geopolitical risks also pose ongoing threats to economic stability.

• US growth forecast increased to 2.4% in 2026 (up from 2.1%), with the euro area at 1.3% and China at 4.5%, supported by fiscal policy and lower interest rates
• AI-driven market momentum is concentrated in North America and Asia, but the IMF cautions this boom could trigger broader financial instability if productivity expectations are not met
• Trade protectionism and geopolitical tensions remain key risks that could reduce corporate profits, elevate prices, and disrupt cross-border supply chains

Anthropic, the AI company behind Claude, is planning an IPO later in 2026 and seeking to raise $25 billion at a $350 billion valuation. The funding round is led by Sequoia Capital with participation from Coatue and GIC, making it one of the largest private companies globally. The company has grown to $9 billion in annual run rate and serves over 300,000 corporate clients.

• Sequoia Capital is investing $1.5 billion as part of the $25 billion fundraising round, valuing Anthropic at $350 billion compared to OpenAI's $500 billion and xAI's $230-235 billion valuations
• Anthropic generated $9 billion ARR in 2025, expects $20 billion in 2026, and projects $70 billion in revenue with $17 billion free cash flow by 2028 when it aims to break even
• The company operates more efficiently than OpenAI with $4.2 billion in 2025 revenue and $3 billion cash burn versus OpenAI's $13 billion revenue and $9 billion cash burn, avoiding costly image and video generation investments

California Democratic Rep. Ro Khanna reintroduced legislation to block institutional investors from purchasing single-family homes, following President Trump's January 7 proposal for a similar moratorium. The bipartisan interest comes as Trump seeks to address economic concerns, with only 36% of Americans approving his handling of the economy ahead of 2026 midterms.

• Khanna's Stop Wall Street Landlords Act would eliminate tax breaks for large institutional investors (those with assets exceeding $100 million) and impose a 100% real estate transfer tax on home sales occurring more than 18 months after enactment
• The bill would prohibit Fannie Mae and Freddie Mac from allowing large institutional investors to purchase mortgages on single-family homes
• Trump's 57% disapproval rating on economic handling creates potential for bipartisan cooperation, with Khanna expressing willingness to work with the president on legislation to help the working class

Treasury Secretary Scott Bessent stated Sunday that the Supreme Court is unlikely to overturn President Trump's tariffs imposed under the International Emergency Economic Powers Act, calling them the president's 'signature economic policy.' The Supreme Court is expected to rule on the legality of Trump's use of IEEPA for tariffs as early as this week. Trump recently announced new tariffs on European goods tied to his demands for Greenland acquisition.

• Bessent compared the situation to the Supreme Court's decision not to overturn Obamacare, arguing the court would not want to 'create chaos' by overruling a major presidential economic policy
• Trump invoked emergency powers under IEEPA to impose tariffs on dozens of nations and recently announced additional tariffs on Europe until a 'Complete and Total purchase of Greenland' is reached
• The administration justifies the emergency tariff powers as necessary for national security to counter Russian and Chinese expansion in the Arctic region, despite widespread rejection from Greenland, Denmark, and European leaders

WisdomTree analysts expect the Treasury yield curve to continue steepening in 2026 as the Federal Reserve nears the end of its rate-cutting cycle. A horizon analysis suggests ultra-short to intermediate-term bonds may deliver positive returns, while longer-dated bonds (10-year to 30-year) face potential underperformance as back-end yields rise. The analysis reinforces a cautious stance on long-duration bonds and favors ultra-short strategies like Treasury Floating Rates.

• The Fed is assumed to be near the end of its easing cycle, with ultra-short and short-term rates expected to remain flat to moderately lower while intermediate to longer-term rates face upward pressure
• Horizon analysis shows 3-month through 5-year maturities producing positive annualized returns, while 10-year to 30-year bonds generate negative returns under a steepening curve scenario
• Treasury Floating Rates, which reference the 3-month T-bill, are positioned as potentially the best-performing ultra-short strategy in this environment

President Donald Trump denied a Wall Street Journal report claiming he offered JPMorgan CEO Jamie Dimon the position of Federal Reserve chair. Trump announced plans to sue JPMorgan within two weeks, alleging the bank 'debanked' him following the January 6, 2021 Capitol attack.

• Trump contradicted the WSJ report via Truth Social post, explicitly stating he never offered Dimon the Fed chair nomination
• Trump plans to file a lawsuit against JPMorgan in the next two weeks over alleged 'debanking' related to January 6 events
• The dispute involves one of America's largest banks and its CEO, a prominent figure in the financial industry

U.S. Treasury Secretary Scott Bessent commented on the criminal probe into Federal Reserve Chairman Jerome Powell, suggesting it stems from 'construction incompetence' related to misleading testimony about Fed headquarters renovations. The Department of Justice has threatened criminal indictment over Powell's Senate testimony, while the final round of interviews for Powell's successor has concluded with an announcement expected before or after President Trump's Davos trip.

• DOJ launched a criminal investigation into whether Powell lied to Congress about the scope of renovations at the Fed's Washington headquarters
• Bessent stated the Fed needs 'a thorough overhaul' and called for more transparency and accountability at the institution
• Trump is expected to announce Powell's replacement in January, either before or after the Davos trip, with Kevin Hassett effectively removed from consideration as Trump wants him to remain as NEC director