Core Viewpoint - The upcoming week is characterized as a "super week" for global capital markets, with significant macroeconomic data and corporate earnings reports expected to heighten market volatility. Key focus areas include inflation dynamics, corporate earnings validation, and geopolitical developments [3]. Economic Indicators - The U.S. is set to release the December CPI data on January 13, with expectations of a notable rebound, attributed to statistical distortions from the government shutdown rather than genuine inflationary pressures [5][6]. - China's December import and export data will be released on January 14, with forecasts indicating a 3.0% year-on-year increase in exports (down from 5.9% in November) and a 2.9% decline in imports (down from a 1.9% decrease in November) [4]. Corporate Earnings - Major U.S. banks, including JPMorgan Chase, will kick off the earnings season, with a focus on the health of the financial system amid high interest rates. Additionally, TSMC's earnings report is anticipated to serve as a bellwether for the global AI supply chain [3][9]. - TSMC is expected to report revenues of approximately NT$1.011 trillion for Q4 2025, with earnings per share projected at NT$2.72, highlighting its role as a key player in AI chip manufacturing [8]. Geopolitical and Industry Developments - The U.S. government faces an increased risk of shutdown as funding runs low, with a critical funding bill set to be reviewed by the Senate. This situation could significantly impact market sentiment and economic stability [13]. - The G7 finance ministers will meet to discuss rare earth issues, reflecting ongoing geopolitical tensions and industry dynamics [13]. - Canadian Prime Minister is scheduled to visit China from January 13 to 17, marking a significant diplomatic engagement focused on trade and energy discussions [13].

Core Insights - Major banks are transitioning from viewing cryptocurrency as a risk to actively integrating it into their operations, focusing on regulated investment products and blockchain-based payment systems [3][4][5] Group 1: JPMorgan's Initiatives - JPMorgan is extending its US dollar deposit token, JPM Coin, onto the Canton Network, indicating progress towards production-ready blockchain infrastructure [4][6] - JPM Coin is designed as a digital claim on JPMorgan's dollar deposits, facilitating faster and more secure transactions on public blockchains [7] Group 2: Morgan Stanley's ETF Offerings - Morgan Stanley is entering the cryptocurrency ETF market with proposed products that provide exposure to Bitcoin and Solana, potentially reaching over 19 million clients [8][9] - The launch of spot Bitcoin ETFs has been highly successful, attracting significant inflows and demonstrating strong investor demand [10][12] Group 3: Barclays and Stablecoin Investments - Barclays has made its first investment in stablecoin infrastructure by backing Ubyx, a stablecoin clearing platform, reflecting traditional finance's growing interest in digital dollar systems [12][13] - This investment aligns with Barclays' strategy to explore opportunities in new forms of digital money, such as stablecoins [13] Group 4: Bank of America's ETF Recommendations - Bank of America has approved its wealth advisers to recommend Bitcoin ETFs, indicating Bitcoin's increasing integration into traditional finance [15][16] - The bank's chief investment office has suggested that clients allocate 1% to 4% of their portfolios to digital assets, highlighting a shift in investment strategy [16]

Group 1 - The Medical-Biomed/Biotech industry group saw a significant surge in 2025, achieving nearly a 34% gain by the end of the year [4] - The stock market is experiencing a strong, broad advance, with the Dow Jones, S&P 500, and Russell 2000 reaching record highs [5][6] - Major companies like Google and Shopify are highlighted as significant winners in 2025, indicating a positive market trend [5] Group 2 - The upcoming earnings season is anticipated to be impactful, with key companies such as JPMorgan and Delta set to report [8][10] - The Nasdaq is currently underperforming due to a rotation in technology stocks, particularly affecting Nvidia and other AI-related companies [10] - There is a notable demand for certain stocks, which is described as "mere peanuts" compared to three other highlighted stocks, suggesting a shift in investor interest [10]

Core Insights - The US corporate bond market shows signs of potential downgrades, with a significant increase in bonds nearing junk status, rising from $37 billion at the end of 2024 to $63 billion currently [1][3] - Despite the increase in high-yield rated bonds, demand from investors remains strong, and earnings are expected to be robust in the near term, keeping spreads relatively stable [2] Group 1: Credit Ratings and Trends - Approximately $55 billion of US corporate bonds transitioned from investment-grade to junk status in 2025, significantly higher than the $10 billion of firms upgraded to high-grade status [3] - BBB- rated debt constitutes only 7.7% of JPMorgan's US high-grade corporate index, marking a record low, indicating a higher susceptibility to downgrades [4] Group 2: Financial Pressures - Companies are facing increased pressure on their balance sheets due to rising interest expenses as they continue to refinance debt, which may lead to more ratings pressure on weaker credits [2][5] - Overall indebtedness is rising relative to earnings, driven by higher yields post-pandemic, increased spending on artificial intelligence, and acquisitions, suggesting underlying weaknesses in credit profiles [5]

Group 1 - JPMorgan Chase & Co. is considered chronically undervalued, with a current stock price reflecting a price-to-earnings ratio of 16 times earnings, indicating it may be a good buying opportunity [1][2] - The company provides a wide range of financial services, including banking, lending, payments, investment management, investment banking, asset management, and advisory solutions [2] - Concerns exist regarding the upcoming earnings report, as CEO Jamie Dimon is known for his cautious approach and may focus on potential risks rather than the stock's undervaluation during the conference call [1]

Core Viewpoint - JPMorgan analyst Matthew Boss has raised the price target for Ross Stores (ROST) to $215 from $200, maintaining an Overweight rating on the shares and adding Ross to its Analyst Focus List [1] Group 1: Price Target and Rating - The price target for Ross Stores has been increased to $215 from $200 [1] - The Overweight rating on Ross Stores shares has been retained [1] - Ross Stores has been added to JPMorgan's Analyst Focus List [1] Group 2: Sales Growth Estimates - Recent fieldwork indicates potential upside for Ross Stores' Q4 same-store sales [1] - JPMorgan has raised its Q4 same-store sales growth estimate to 5.5%, surpassing the company's management outlook of 3%-4% [1]

Group 1 - Morgan Stanley and Citigroup are set to release their financial reports on January 15, 2026 [2] - The second China eVTOL Innovation Development Conference is scheduled for January 15, 2026 [2] - The fifth AIGC China Developer Conference will take place on January 18, 2026 [2] Group 2 - The U.S. Federal Reserve will publish its Beige Book on January 14, 2026, providing insights into economic conditions [2] - The OPEC monthly oil market report is expected to be released on January 14, 2026 [2] - The EIA will publish its monthly short-term energy outlook on January 14, 2026 [2]

Group 1 - JP Morgan maintains its forecast for the average silver price in 2026 at $40.1 per ounce [2] - The forecast for the average copper price in 2026 remains unchanged at $12,075 per ton [2] Group 2 - China, as the largest copper consumer globally, faces three major challenges: increasing dependence on foreign resources, overcapacity in the midstream processing sector, and downstream demand being suppressed by high copper prices [2] - To assist the industry in addressing these challenges, Shanghai Nonferrous Metals Network collaborates with copper industry chain enterprises to compile the "2026 China Copper Industry Chain Distribution Map" in both Chinese and English [2]

Investment Rating - The report maintains a rating of "Underperform" for the U.S. stock market [4] Core Insights - The overall market is showing a recovery, with small-cap and consumer sectors gaining momentum. The S&P 500 increased by 1.6% and the Nasdaq by 1.9% this week. Small-cap growth stocks outperformed with a 4.7% increase, while small-cap value stocks rose by 4.5% [1] - 21 out of 24 sectors experienced gains, with notable increases in retail (+8.4%), durable goods and apparel (+5.2%), and materials (+4.9%). Conversely, technology hardware and equipment saw a decline of 3.2% [1] - There is a significant inflow of funds into technology giants, with the estimated fund flow for S&P 500 components at +$130.2 billion this week, compared to -$30.2 billion the previous week [2] Summary by Sections 2.1 Investment Returns - The weighted average price return for various sectors shows significant performance, with retail at +8.4%, durable goods and apparel at +5.2%, and materials at +4.9%. In contrast, technology hardware and equipment reported a decline of -3.2% [13] 2.2 Fund Flows - Fund flows indicate a strong interest in semiconductor products and equipment (+$2.756 billion), technology hardware and equipment (+$1.724 billion), and retail (+$1.686 billion). However, sectors like telecommunications experienced outflows of -$0.090 billion [15] 2.3 Earnings Forecast - The earnings forecast for the S&P 500 components shows a slight increase of +0.3% this week, with 17 sectors experiencing upward revisions. Notable increases were seen in semiconductor products and equipment (+0.9%) and materials (+0.6%) [16] 2.4 Valuation Levels - Valuation levels across sectors reflect varying performance, with the semiconductor sector showing a significant increase in earnings expectations, while sectors like telecommunications and durable goods and apparel faced downward adjustments [18]

Group 1 - President Trump proposed a one-year cap on credit card interest rates at 10%, claiming the American public is being "ripped off" [1] - The announcement has received criticism from various political figures, including Sen. Bernie Sanders, who labeled the cap as "unacceptable" [3] - The issue of high credit card interest rates has been a persistent concern, particularly as many Americans lack sufficient emergency savings, leading to financial strain [2] Group 2 - Sanders criticized Trump's proposal, stating it contradicts his earlier commitment to regulate Wall Street and impose a 10% cap on interest rates [3] - Significant profits of large banks have been highlighted, with JPMorgan CEO Jamie Dimon reportedly increasing his wealth by $770 million in 2025 [4] - Sen. Elizabeth Warren criticized Trump's promises regarding the credit card rate cap as empty and accused him of ignoring affordability [4] Group 3 - Hedge fund manager Bill Ackman warned that if credit card lenders cannot charge adequate rates, they may cancel millions of consumer cards, pushing consumers towards loan sharks with worse terms [5]