General Market News

U.S. Treasury Secretary Scott Bessent announced that the Trump administration's $200 billion mortgage-backed securities purchase program aims to offset the Federal Reserve's monthly MBS roll-off of approximately $15 billion. The initiative, ordered by President Trump to address housing affordability issues, will be funded by Fannie Mae and Freddie Mac's balance sheets and began with an initial $3 billion purchase.

• The Fed currently holds over $2 trillion in MBS and has been reducing holdings by $15-17 billion monthly for over two years, a dynamic some believe has prevented mortgage rates from falling further
• The 30-year fixed mortgage rate has declined to around 6.2% from nearly 8% in 2024, but remains well above the 3% range seen during the pandemic
• Bessent stated the purchases are unlikely to directly lower mortgage rates but could indirectly reduce them by narrowing the yield spread between Fannie/Freddie securities and U.S. Treasuries, while potentially boosting the firms' earnings

Investor Louis Navellier warns that the market may be entering a 'Hidden Crash' similar to the 2000-2009 Lost Decade, where stocks stagnate rather than collapse dramatically. He argues that narrowing market leadership and slowing earnings momentum in mega-cap stocks could trap investors in 'dead money' that generates no meaningful returns for years, even as opportunities emerge elsewhere.

• The Magnificent Seven stocks are already showing weakness, with all but two now lagging the broader market despite the ongoing AI Revolution remaining real
• During the 2000-2009 Lost Decade, major names like Cisco never regained prior highs while lesser-known companies like Monster Beverage and Freeport-McMoRan delivered gains exceeding 1,000%
• Navellier's Stock Grader system identified several under-the-radar stocks in 2025 that delivered triple-digit returns, including Sezzle (555.57%) and SPX Technologies (119.77%)

BCA Research argues that Federal Reserve rate cuts could sustain stock market gains even if AI infrastructure spending slows, challenging fears that a slowdown in tech capital expenditure would trigger a market downturn. Big tech companies are expected to spend over $500 billion on infrastructure in 2026, reaching levels that historically marked peak investment cycles. However, declining real interest rates from Fed cuts could support stock valuations similar to the 2021 post-pandemic period.

• U.S. tech giants (Microsoft, Alphabet, Amazon, Meta, Oracle) are projected to spend more than $500 billion on AI infrastructure in 2026, matching tech capex-to-GDP levels seen at peaks of previous cycles including the 1980s PC boom and 1990s Dotcom era
• Real bond yields (inflation-adjusted returns), not nominal rates, are the key driver of stock valuations; declining real yields from Fed rate cuts amid sticky inflation could prolong the rally even as AI spending plateaus
• The Fed's rate-cutting trajectory faces uncertainty as sticky inflation, stabilizing jobs, or strong economic growth could prevent aggressive cuts, with odds of no rate cuts in H1 2026 jumping to a one-month high after recent data

U.S. equity indices reached or approached record highs on January 9, 2026, as weaker-than-expected December jobs data (50,000 vs. 60,000 forecast) reinforced expectations for Federal Reserve rate cuts in 2026. The Nasdaq 100 eyed a record high of 24,019.99 while the S&P 500 hit a new all-time high, with markets pricing in approximately 54 basis points of easing for the year despite expectations for a pause at the January Fed meeting.

• Intel surged 9.78% to lead Nasdaq-100 gains after CEO Lip-Bu Tan had a 'great meeting' with President Trump, while chip stocks broadly rallied with Lam Research up 8.15% and ASML up 6.55%.
• Utilities led sector performance with a 1.64% gain at mid-session, followed by Materials (1.57%) and Consumer Staples (1.09%), while 10 of 11 S&P 500 sectors traded higher.
• The U.S. Supreme Court delayed ruling on Trump's sweeping tariffs, with investors anticipating heightened volatility across financial sectors once a decision is announced.

The S&P 500 started 2026 at an all-time high after three consecutive years of strong gains (26% in 2023, 25% in 2024, and 18% in 2025), raising investor concerns about elevated valuations and potential market corrections. Historical data shows that buying at all-time highs has been a winning strategy, as record highs tend to cluster together and signal positive future market outlook. Analysts recommend continuing to invest in stocks despite high valuations, either through individual stock selection or low-cost index funds like the Vanguard S&P 500 ETF.

• Since recovering from the 2022 bear market, the S&P 500 closed at record highs 95 times through the end of 2025, demonstrating that all-time highs often lead to further gains rather than corrections
• BlackRock research found that while one-year returns at all-time highs average 7.6% versus 8.8% on other days, three- and five-year returns are higher when investing at record levels, undermining market timing strategies
• The S&P 500 forward P/E ratio currently sits around 22, a historically elevated level reached only a few times, though long-term stock returns still substantially outpace Treasury yields and cash holdings

The Federal Reserve Board announced the 2026 chairs and vice chairs for its 12 regional banks, appointing corporate leaders including Emerson Electric CEO Lal Karsanbhai as St. Louis Fed chair and Liberty Mutual CEO Tim Sweeney as Boston Fed deputy chair. These directors meet regularly with Fed policymakers and provide economic perspectives that help inform interest rate decisions.

• Regional bank board positions include executives from major corporations like Emerson Electric and Liberty Mutual Insurance, as well as leaders from small businesses and non-profits
• Fed bank directors meet regularly with policymakers to share their views on the economy, which directly influences the Fed's rate-setting decisions
• The appointments establish leadership for all 12 Federal Reserve regional banks for the current year

The Dow Jones Industrial Average and S&P 500 reached record highs during the first full week of 2026, driven by the U.S. capture of Venezuelan President Nicolás Maduro, which boosted defense and energy stocks. The Nasdaq pulled back from gains as investors rotated out of tech stocks, while traders digested weak December jobs data that sparked rate cut hopes and awaited President Trump's tariff decisions.

• Defense stocks like Lockheed Martin and Huntington Ingalls Industries, along with energy companies Chevron and Exxon Mobil, surged following the regime change in Venezuela
• The Nasdaq retreated after strong AI stock performance as President Trump moved to restrict defense companies from issuing dividends and stock buybacks, while oil prices declined on oversupply concerns
• The first earnings season of 2026 begins next week with major banks including JPMorgan, Bank of America, Goldman Sachs, and Morgan Stanley reporting, alongside key inflation data releases

President Donald Trump indirectly revealed December jobs data in a social media post Thursday evening, approximately 12 hours before the official Friday release, apparently violating long-standing Office of Management and Budget policy that prohibits executive branch officials from commenting on such data early and requires a 30-minute wait after release.

• Trump's post disclosed that private sector payrolls expanded by 654,000 for full year 2025, allowing traders to estimate Friday's December figure and potentially rule out a job loss scenario before the official 8:30 AM release
• The official December jobs report showed nonfarm payrolls increased 50,000, with 48,000 from private sector, slightly below estimates but alleviating concerns about steeper employment drops
• While the post did not allow exact calculation due to missing revision data, it gave market participants advance insight that could have influenced trading positions ahead of the market-moving release

Goldman Sachs strategists believe fourth-quarter earnings will produce greater stock volatility than currently priced into options markets, with implied moves averaging just 4.5% compared to 5.4% two quarters ago. They recommend buying options to capitalize on expected earnings surprises, particularly in utilities, healthcare, materials, and industrials sectors. Goldman's improved earnings forecasts and S&P 500 price targets suggest fundamentals have outpaced recent stock price gains.

• Goldman expects upside surprises at Meta, UnitedHealth Group, Arista Networks, and Robinhood, recommending investors buy call options on these stocks ahead of earnings
• Texas Instruments and Southwest Airlines face potential downside from margin pressure, creating opportunities for put option strategies
• Current implied earnings volatility is near 20-year lows at 4.5% average move per stock, despite Goldman's view that fundamental drivers of volatility remain intact

President Trump ordered $200 billion in mortgage bond purchases to lower mortgage rates and make homeownership more affordable. Mortgage lender stocks surged in response, with companies like Rocket Cos and UWM gaining 8% and 6% respectively. The Federal Housing Finance Agency Director confirmed implementation, though analysts debate the actual impact on consumers and housing markets.

• TD Cowen expects 30-year mortgage rates could drop from current 6.2% to roughly 5.25% by year-end, or closer to 5% if purchases happen quickly
• Each quarter-point decline in mortgage rates would reduce monthly payments on a $400,000 loan by up to $70, according to Bank of America estimates
• Wolfe Research called the $200 billion program 'smaller than anticipated' with likely 'positive but fairly modest' impact, while questions remain about potential Fannie Mae and Freddie Mac IPOs

Recent labor data shows a 'hiring recession' with job openings at 7.15 million (below expectations), hiring rates near Great Recession lows, and 2024 job cuts up 58% year-over-year to 1.2 million. Despite this weakness, analysts predict unemployment could hit 6% while GDP surges to 5% in 2026, as AI-driven productivity severs the traditional relationship between labor and economic output, creating a K-shaped economy where asset owners prosper while workers face displacement.

• The hiring rate fell to 3.2% (lowest since April 2020 except Great Recession period) while the 'quits rate' dropped to 2%, signaling worker caution amid fewer job opportunities
• AI automation is enabling strong productivity and GDP growth with fewer workers, potentially producing 5% GDP growth alongside 6% unemployment as machines replace human labor without reducing economic output
• Investors are warned to rotate away from stagnating Mega-cap tech ('Lag 7' now trailing broader market by 3+ percentage points YTD) toward companies effectively harnessing AI efficiency, while states explore taxing unrealized capital gains as wealth inequality widens

U.S. stock indices rose on Friday following mixed December employment data, with the S&P 500 approaching its all-time high of 7014. December payrolls added 50,000 jobs, missing the 73,000 forecast, while unemployment dropped to 4.4%, beating expectations. The Dow Jones led weekly gains at 2.1%, with the S&P 500 and Nasdaq up 1% and 1.1% respectively.

• December payrolls rose by 50,000, below the 73,000 forecast, but unemployment fell to 4.4% from 4.6%, signaling steady economic growth
• S&P 500 futures traded near all-time high of 7014 with key uptrend support at 6907, maintained since November 21
• Utilities sector led gains with 1.88% jump, driven by nuclear power companies Vistra and Oklo surging 15% and 18% after securing a deal with Meta for AI power supply

The U.S. economy added 50,000 jobs in December 2025, below the expected 70,000, while the unemployment rate unexpectedly fell to 4.4% from 4.6%. The mixed employment report reinforces expectations that the Federal Reserve will hold interest rates steady at its January 28 meeting, with analysts characterizing the labor market as a 'low hire and low fire environment.'

• Job growth of 50,000 in December missed economist estimates of 70,000, signaling continued cooling in the labor market
• Unemployment rate dropped to 4.4% despite weak payrolls, with labor force participation holding steady at 62.4% and employment-population ratio unchanged at 59.7%
• Analysts view the report as confirming a January rate hold is highly unlikely to change, though Wells Fargo maintains a base case for 'a couple more rate cuts' later in 2026

The U.S. economy added only 50,000 jobs in December 2025, marking a significant hiring slowdown despite strong GDP growth of 4.3% in Q3. The entertainment industry was among sectors shedding jobs, while the unemployment rate fell slightly to 4.4%, driven primarily by gains in healthcare and hospitality.

• Entertainment sector lost 2,100 jobs in movies and music (falling to 394,300 total), while broadcast and content provider jobs dropped by 100 positions to 334,000
• Job gains concentrated in food services, healthcare, and social assistance, while retail trade shed 25,000 positions
• Economist described 2025 as the 'worst year for hiring outside of a recession since 2003' with almost no hiring since April, calling it a 'hiring recession' amid a 'jobless boom'

US stocks opened mixed on Friday following a weaker-than-expected December jobs report showing 50,000 nonfarm payrolls added versus 73,000 expected, though unemployment fell to 4.4%. The S&P 500 rose 0.2% and the Dow gained 0.4%, while investors awaited a potential Supreme Court ruling on President Trump's global tariffs that could significantly impact trade policy.

• December nonfarm payrolls increased by only 50,000, below the 73,000 estimate and November's revised 56,000, but unemployment unexpectedly dropped to 4.4% from an expected 4.5%
• Markets remain on track for weekly gains, with the S&P 500 up 0.9%, the Dow up 1.8%, and the Nasdaq up 1.1% for the week
• Prediction market Kalshi assigns a 28% probability the Supreme Court will fully uphold Trump's tariffs; Wells Fargo estimates striking them down could lift S&P 500 EBIT by 2.4% in 2026

US nonfarm payrolls added only 50,000 jobs in December, significantly missing the 73,000 estimate, while the unemployment rate improved to 4.4% from 4.5%. The weak hiring reflects a 'no hire, no fire' labor market where companies are reluctant to add workers despite steady economic growth, with full-year 2025 job gains averaging just 49,000 per month compared to 2024's robust pace.

• Total payroll employment for 2025 rose by only 584,000 jobs (averaging 49,000 monthly), a sharp slowdown from 2 million jobs added in 2024, with hiring concentrated in food services, healthcare, and social assistance.
• Long-term unemployment (27+ weeks) remained elevated at 1.9 million, nearly 400,000 higher than a year earlier, while the BLS estimated 911,000 fewer jobs were created through March 2025 than previously reported.
• The Federal Reserve is now unlikely to cut interest rates in January following the unemployment rate decline, with markets rising modestly as investors weigh trade policy risks and await benchmark data revisions.

The U.S. unemployment rate fell to 4.4% in December from 4.5% in November, despite slower job growth of only 50,000 positions added. This labor market data is leading traders to expect the Federal Reserve will pause rate cuts until June, giving the central bank room to monitor inflation before resuming policy easing.

• Traders now see only a 45% chance of a rate cut by April (down from 50% before the report), with June viewed as more likely timing for resuming cuts
• The Fed reduced rates by 0.75 percentage points in the prior year to support the job market, though some policymakers warned this could impede progress on above-target inflation
• The improved unemployment rate, despite weak job gains, provides the Fed breathing room to hold rates steady while waiting for clearer inflation data

Baby Boomer investors are gravitating toward the 2026 Small Dogs of the Dow strategy, betting on additional Federal Reserve rate cuts following three cuts in 2025. The five highest-yielding Dow stocks—Verizon (6.82%), Chevron (4.58%), Merck (3.02%), Procter & Gamble, and Amgen (2.83%)—offer a defensive play amid an expensive S&P 500 trading at 31 times trailing earnings and anticipated midterm election volatility.

• The Small Dogs strategy has historically outperformed the broader Dow since 2000, particularly excelling in tough markets like 2008 and 2022 by providing stability and high dividend income
• Investors expect two more Fed rate cuts in 2026, following leadership changes at the Federal Reserve, which historically benefits high-yield value stocks over growth stocks
• The five Small Dogs span defensive sectors—telecom (Verizon at 9.1x earnings), energy (Chevron with AA credit rating), healthcare (Merck down 30% year-over-year), consumer staples (P&G with 185-year dividend history), and biotech (Amgen in biosimilars)

Tech executives and founders enriched by soaring stock prices are increasingly using exchange funds to diversify concentrated holdings without triggering immediate capital gains taxes. These funds allow wealthy investors to swap single-stock positions for a diversified portfolio by pooling assets with other investors, though they require seven-year lock-up periods to maintain tax benefits.

• Exchange funds pool concentrated stock positions from multiple investors into diversified portfolios that mirror benchmark indexes, with 80% in stocks and 20% in non-securities like real estate as required by the IRS
• Only accredited investors worth over $1 million qualify, and early redemption before seven years eliminates tax benefits and may trigger steep fees, with investors receiving back only their original concentrated stock
• Advisors recommend no single stock exceed 10% of a portfolio, and some strategists increasingly view exchange funds as wealth transfer tools, though getting clients to hedge remains difficult as they expect past outperformance to continue

US employers added 256,000 jobs in December 2024, marking the weakest year of job growth since the pandemic. The unemployment rate fell to 4.1% from November's 4.2%, though October and November figures were revised downward by 76,000 jobs. The data comes as the Federal Reserve weighs future interest rate decisions amid political pressure from the Trump administration to cut rates.

• Economists characterize the labor market as in a 'no hire, no fire' phase with subdued but continuing job growth, while December layoffs were nearly half November's level
• Federal Reserve officials signal likely pause in rate cuts at their January meeting, with rates currently at 3.5-3.75%, despite Treasury Secretary Scott Bessent urging continued cuts
• Inflation cooled to 2.7% in November from 3% in September, while Fed officials suggest Trump's immigration and tariff policies have destabilized the labor market and inflation outlook