General Market News

President Donald Trump announced he will halt dividends and stock buybacks for defense companies until they increase weapons production and delivery speed. Trump criticized defense contractors for prioritizing shareholder returns over investing in plants and equipment, singling out Raytheon (RTX) as 'least responsive' to military needs. U.S. defense stocks fell sharply following the announcement, with the aerospace and defense ETF (ITA) dropping 1.5%.

• RTX (Raytheon) fell 4.7% and was specifically prohibited from buybacks until it 'gets their act together,' having spent tens of billions on repurchases
• Other major defense contractors also declined: Lockheed Martin down 4.7%, Northrop Grumman down 5%, and General Dynamics down 3.4%
• Trump also targeted 'exorbitant and unjustifiable' executive pay and demanded companies build new modern production plants for military equipment

Elliott Wave analysis predicts the Nasdaq 100 will continue its bull run into April 2026, targeting new all-time highs around 27,225, followed by a 2022-like bear market. The index is currently advancing in a '3rd of a 3rd wave' after holding the November 2025 low of 23,854, with the uptrend remaining intact as long as key support levels hold.

• Short-term target of approximately 26,825 for the current wave, followed by a pullback to 26,155, then a rally to 27,225 for the final wave
• Critical support levels range from 25,639 down to 23,854, with each break increasing the probability by 20% that the uptrend has ended
• A significant bear market similar to 2022 is expected after the current bull wave completes in April 2026, before the next multi-year rally begins

US stock markets reached intraday records on Wednesday before retreating, with the Dow closing down 0.5% and the S&P 500 essentially flat. The reversal reflected conflicting economic signals: strong ISM services data showing a 10-month high of 54.4 clashed with weak December ADP employment numbers that missed forecasts by 30,000 jobs. Investors showed caution after three consecutive days of record rallies, rotating from cyclicals to defensive positions.

• The ISM services index hit 54.4 in December with new orders at 57.9, but input price inflation remained elevated at 64.3, complicating the Fed's rate-cut calculus
• ADP reported only 15,000 private sector jobs added in December versus 45,000 expected, signaling potential labor market cooling faster than anticipated
• Energy stocks led by Valero (+3%) initially boosted the rally on Venezuelan oil-supply optimism, but crude prices fell with WTI dropping $0.44 to $56.69 per barrel on oversupply concerns

President Donald Trump announced he will not permit defense companies to issue dividends or stock buybacks until they address his concerns about the industry. Trump criticized defense contractors for slow equipment delivery and excessive executive compensation in a Truth Social post. The binding authority and implementation mechanism of this announcement remain unclear.

• Trump specifically targeted 'exorbitant and unjustifiable' executive pay packages at defense firms, linking compensation concerns to slow delivery of military equipment
• The announcement was made via Truth Social, but the White House did not immediately clarify what legal authority or enforcement mechanism would be used
• The policy aims to address complaints about delivery speed to both the U.S. military and American allies

Major U.S. banks including Goldman Sachs, Morgan Stanley, and PNC will kick off the first earnings season of 2026 next week. Critical inflation data, including CPI and PPI reports, is scheduled for midweek alongside multiple Federal Reserve speeches. The week is packed with economic indicators that could drive significant market movements.

• Big bank earnings reports are scheduled throughout the week, marking the start of Q1 2026 earnings season
• Consumer Price Index (CPI) data due Tuesday, Jan. 13, and Producer Price Index (PPI) data due Wednesday, Jan. 14, will provide key inflation insights
• Additional economic data includes retail sales, existing home sales, jobs data, and manufacturing surveys, alongside multiple Fed official speeches

President Donald Trump announced on January 7 that defense companies will be prohibited from paying dividends or conducting stock buybacks until they improve military equipment production speed and maintenance. Trump also stated that defense executives should not earn more than $5 million annually until they build new, modern production plants, calling current compensation packages 'exorbitant and unjustifiable.'

• Trump criticized defense companies for not producing military equipment rapidly enough and failing to maintain it properly or quickly
• Executive compensation in the defense industry will be capped at $5 million, described as 'a mere fraction' of current pay levels
• The restrictions will remain until companies build new and modern production plants for delivering, maintaining, and building future military equipment

Global equity markets have surged in early January 2026, with major indices including the Dow Jones, S&P 500, German DAX, and Asian markets reaching or nearing all-time highs. Investors are rotating profits from tech giants into previously undervalued sectors, broadening market participation and reducing concentration risk. The rally is fueled by Federal Reserve rate cuts and low volatility, though analysts caution about complacency with all investors positioned bullishly.

• Major indices hit records: Dow and S&P 500 at all-time highs, German DAX broke 25,000, FTSE 100 above 10,000, and Asian markets (Nikkei, Kospi, Shanghai, Hang Seng, Nifty 50) near peaks
• The VIX volatility index has drifted to 12-month lows despite markets at all-time highs, indicating investors see minimal need for downside protection
• Fed has cut rates to lowest levels in three years with more cuts expected, while 'bad news is good news' mentality persists where weak data boosts rate cut expectations and strong data signals economic strength

President Trump announced plans to ban large institutional investors from purchasing single-family homes, aiming to reduce home prices for individual buyers. Trump stated he will ask Congress to codify this measure and plans to discuss additional housing affordability proposals at the Davos World Economic Forum. The move targets corporate ownership of residential properties under the principle that 'people live in homes, not corporations.'

• The ban specifically targets large institutional investors, preventing them from buying single-family residential homes
• Trump will seek Congressional action to formalize the ban into law and present further housing proposals at Davos
• The initiative aims to address housing affordability by reducing competition from corporate buyers in the residential market

US new vehicle sales rose 2% to 16.2 million units in 2025, with the White House crediting Trump policies for the gain. However, analysts warn sales could slump in 2026 as automakers begin passing tariff costs onto consumers, with average vehicle prices already reaching $47,000-$50,000. Major automakers like Toyota say they cannot continue absorbing tariff costs from 15-25% levies on imports from Japan, Mexico, and Canada.

• GM, Toyota, and Lexus reported annual sales increases of 5.5%, 7%, and 8% respectively, while demand centered on gas-powered trucks, SUVs, and hybrids rather than EVs
• Average new vehicle prices reached $47,104-$49,740 in December 2025, up from prior months, with further increases expected as tariff costs are passed to buyers
• Ford and GM scrapped EV programs after Trump ended the $7,500 EV tax credit, taking charges of $19.5 billion and $1.6 billion respectively to pivot back to gas vehicle production

News Corp's Dow Jones has signed an exclusive deal with Polymarket to integrate real-time prediction market data across its outlets including The Wall Street Journal, Barron's, and MarketWatch. The partnership will bring market-implied expectations on corporate performance and future events to readers through dedicated data modules on digital and print platforms. Financial terms were not disclosed, but the deal reflects growing institutional interest in prediction markets following the 2024 presidential election.

• Dow Jones will launch consumer-facing features including a custom earnings calendar with market-implied expectations around corporate performance using Polymarket's cryptocurrency-based prediction data
• Polymarket, the world's largest prediction market platform, was reportedly in discussions to raise funds at a valuation between $12 billion and $15 billion as of October
• The deal follows similar moves by competitors, with CNBC partnering with prediction market startup Kalshi in December to bring real-time probability data to its broadcasts and digital platforms

Wells Fargo strategists predict a broader U.S. stock market rally in the first half of 2026, moving beyond mega-cap dominance that has characterized recent years. The shift could be driven by household tax refunds, stronger earnings growth, and investor rotation into laggard stocks, potentially reducing concentration risk in the S&P 500.

• Heavily shorted stocks in the Russell 3000 could outperform as investors rotate away from mega-caps and cover bearish positions
• Tax refunds are expected to rise by $800 per person versus last year, potentially encouraging risk-taking and fueling the rally
• Financials, materials, energy, and technology sectors could benefit, with 70% of companies in the index potentially gaining from Venezuelan investment opportunities following Trump's $2 billion crude oil deal

Hedge funds delivered strong returns of 16.24% in 2025, matching the S&P 500's 16.4% gain, according to a Goldman Sachs prime brokerage report. Large multi-manager funds including D.E. Shaw, Balyasny, Bridgewater, and Point72 achieved mostly double-digit gains, driven by an AI-powered stock market rally and volatility from U.S. trade policy uncertainty. Hedge funds deployed record leverage levels to amplify returns during the buoyant market environment.

• Healthcare-focused long/short funds surged 27.2% for the year, while tech, media, and telecom funds gained 13.5%; systematic and quant funds posted 19.11% annual returns
• Gross leverage for global long/short funds reached an all-time high of 213.2%, with overall hedge fund leverage at 292.8% (roughly $300 in positions for every $100 of investor capital)
• In December, hedge funds unwound North American positions at the fastest pace in four months, while U.S. multi-managers extended their winning streak to nine consecutive months of positive returns

U.S. stock indices showed mixed performance on January 7, 2026, with the Dow Jones touching a fresh record high before retreating. Healthcare gained 1.5% while materials dropped 1.1%, driven by commodity volatility and a Venezuela oil deal. The S&P 500 approached record territory at 7,014 as sector performance diverged sharply.

• Healthcare led all sectors with a 1.52% gain (Eli Lilly up 4.88%), while materials was the worst performer at -1.14% amid commodity-driven volatility in oil, gold, and silver.
• President Trump announced Venezuela will transfer up to 50 million barrels of oil to the U.S., pressuring crude oil prices but boosting energy refiners like Valero Energy (+5.05%).
• Intel surged 6.47% as the top gainer while energy storage stocks Western Digital, First Solar, and Seagate Technology each dropped over 8.5%.

US stocks opened mixed on Wednesday, with the Dow Jones Industrial Average rising 0.2% to a new record high while the S&P 500 remained flat and the Nasdaq Composite fell 0.1%. The session was marked by mixed economic signals, including weaker-than-expected private payroll data and falling oil prices following President Trump's comments about Venezuelan oil supplies. Investors remained cautious ahead of additional economic data later in the week.

• ADP reported 41,000 private-sector jobs added in December, below the 48,000 consensus estimate, with all gains concentrated in services industries while manufacturing lost 5,000 positions
• Crude oil prices dropped sharply after Trump announced Venezuela would provide up to 50 million barrels of oil to the US, weighing on energy stocks but benefiting refiners on expectations of eased sanctions
• The S&P 500 is approaching 7,000 and the Dow nearing 50,000 after three consecutive years of double-digit gains, though forecasters cite risks including trade tensions and signs of economic slowdown

President Trump announced Venezuela will transfer 30-50 million barrels of sanctioned oil to the U.S., with proceeds controlled by his administration. Meanwhile, U.S. forces seized a ghost tanker claiming Russian protection in the North Atlantic. Oil stocks showed mixed reactions after an initial Monday surge, with analysts skeptical about near-term investments in Venezuela's deteriorating infrastructure.

• Trump stated the oil will be sold at market price with proceeds benefiting both Venezuela and the U.S.; Energy Secretary Wright confirmed the crude is 'backed up' in storage and sales will continue indefinitely with sanctions rolled back
• Rystad Energy estimates Venezuela needs $183 billion in investment through 2040 to restore production to 3 million barrels per day, with only 300,000-350,000 barrels per day restorable quickly with limited spending
• Chevron, the lone U.S. producer with Venezuelan operations, is seen as best positioned; refiner stocks like Valero and Marathon Petroleum initially surged over 6-8% Monday but retreated Tuesday as near-term optimism faded

Private sector employers added only 41,000 jobs in December, falling short of the 47,000 jobs economists had expected, according to ADP's payroll report. November's job losses were also revised to show 29,000 positions lost. The report reveals a divergence between small businesses, which recovered with positive hiring, and large employers, which reduced their workforce.

• December's 41,000 job gain missed economist expectations of 47,000 new positions
• November's figures were revised to show a loss of 29,000 jobs (from initially reported 32,000 loss)
• Small businesses drove end-of-year hiring gains while large employers pulled back on hiring

Exchange-traded funds set a record with $1.5 trillion in net inflows during 2025, driven by strong performance across stocks, bonds, and commodities. December alone saw $235 billion in flows, helping the fourth quarter reach $564 billion. The momentum reflects ETFs' growing dominance in the investment landscape since the 2019 ETF rule implementation.

• U.S. growth ETFs dramatically outpaced value ETFs with $134 billion in inflows versus $73 billion, marking the largest gap on record despite concentration risk concerns
• Bond ETFs attracted nearly $500 billion for the year, with active bond ETFs contributing $178 billion of those inflows
• Stocks, bonds, and commodities delivered their strongest combined performance since 2019, returning 21%, 8%, and 16% respectively

ADP's December jobs report showed private employers added 41,000 jobs, slightly below the 47,000 forecast, while November data was revised to a loss of 29,000 jobs. The modest rebound in hiring may reduce pressure for another Federal Reserve rate cut, with markets pricing in only 16% odds of a cut on January 28. S&P 500 futures remained flat following the data release.

• Education and health sectors led job gains with 39,000 additions, while leisure and hospitality added 24,000 jobs; manufacturers cut 5,000 positions
• Markets are pricing in just 16% odds of a Fed rate cut on Jan. 28, rising to 47% for a potential cut by March 18
• Friday's BLS jobs report is expected to show 55,000 total job gains with unemployment holding at 4.6%, though Fed Chair Powell noted BLS data may be overstating gains by 60,000 monthly

Private sector employers added 41,000 jobs in December according to ADP, reversing November's loss of 29,000 jobs but falling slightly short of the 48,000 expected. The gain came entirely from services industries and smaller companies with fewer than 500 workers, while goods-producing sectors and large employers showed weakness.

• Job growth concentrated in services: education and health added 39,000 jobs, leisure and hospitality added 24,000, while manufacturing lost 5,000 positions
• Small businesses drove hiring with nearly all gains at companies under 500 employees; large firms added only 2,000 jobs
• Wage growth remained moderate at 4.4% annually for job stayers and 6.6% for job changers, with the official BLS jobs report expected to show 73,000 new jobs

The S&P 500 has posted three consecutive years of double-digit gains (24%, 23%, and 16%), marking only the eighth such streak since 1950. Historical data shows stocks tend to significantly underperform after these streaks, with the next year averaging just 3.03% returns compared to typical 9.58% annual gains. The concern is heightened because 2026 is the second year of a presidential cycle, when markets historically underperform, especially in the first half.

• After three straight double-digit years, the SPX averaged only 3.03% returns the following year with 43% positive outcomes, versus typical 9.58% returns with 73% positive outcomes since 1950
• Second-year presidential cycle returns average just 4.6% annually, with January-June showing a 2% average loss and only 53% positive outcomes during this six-month period
• Only two prior instances match current conditions (1997 and 2021): SPX gained 26% after 1997 but fell 19% after 2021, with January performance proving a reliable early indicator in both cases