Market Overview - U.S. stock futures showed volatility, fluctuating between gains and losses following a higher close on Monday [1] - Major benchmark indices had mixed futures, with the Dow Jones down 0.11%, S&P 500 up 0.23%, and Nasdaq 100 up 0.52% [3][9] Federal Reserve Insights - The Federal Reserve is set to begin its first two-day policy meeting of the year, with a 97.2% likelihood of maintaining current interest rates [2] Company Earnings and Performance - General Motors (NYSE: GM) is projected to report quarterly earnings of $2.20 per share on revenue of $45.80 billion, with a premarket decline of 0.48% [7] - UnitedHealth Group (NYSE: UNH) is expected to report earnings of $2.10 per share on revenue of $113.82 billion, experiencing a premarket drop of 8.24% [7] - Nucor Corp. (NYSE: NUE) reported quarterly earnings of $1.73 per share and revenue of $7.687 billion, both missing analyst expectations, leading to a decline of 3.11% [7] - Humana Inc. (NYSE: HUM) shares fell 12.23% due to a proposal to keep payment rates for private Medicare plans flat [14] - Cloudflare Inc. (NYSE: NET) saw a rise of 7.73% amid social media excitement over an AI project [14] Analyst Insights - Professor Jeremy Siegel maintains an optimistic outlook for 2026, emphasizing a productivity revival driven by technology and a positive trajectory for the economy and markets [10][11] - Siegel notes that small-cap and value stocks are outperforming early in 2026, indicating a shift in market focus [11][12]

Market Sentiment - The CNN Money Fear and Greed index showed an improvement in overall market sentiment, remaining in the "Neutral" zone with a reading of 55.3, up from 53.7 [5][6] - U.S. stocks settled higher on Monday, with the Dow Jones index gaining over 300 points, closing at 49,412.40, while the S&P 500 rose 0.50% to 6,950.23 and the Nasdaq Composite gained 0.43% to 23,601.36 [4] Company Performance - Revolution Medicines Inc (NASDAQ:RVMD) shares dropped 17% following reports that Merck is no longer in discussions to acquire the company [2] - Steel Dynamics Inc (NASDAQ:STLD) reported downbeat earnings for the fourth quarter [2] Economic Data - The Chicago Fed National Activity Index improved to -0.04 in November from -0.42 in October [3] - U.S. durable-goods orders rose 5.3% month-over-month in November, following a revised 2.1% decline in October, exceeding market estimates of a 3.7% increase [3] Sector Performance - Most sectors on the S&P 500 closed positively, with communication services, information technology, and utilities stocks recording the biggest gains, while consumer discretionary and consumer staples stocks closed lower [4]

Core Viewpoint - U.S. stock futures are mixed, with several companies expected to report earnings that may attract investor attention today [1] Group 1: Earnings Reports - General Motors Co (NYSE:GM) is expected to report quarterly earnings of $2.20 per share on revenue of $45.80 billion, with shares falling 0.5% to $79.05 in after-hours trading [1] - W R Berkley Corp (NYSE:WRB) reported quarterly earnings of $1.13 per share, meeting analyst expectations, while sales of $3.721 billion exceeded estimates of $3.661 billion, leading to a 1.2% increase in shares to $67.71 [1] - Boeing Co (NYSE:BA) is anticipated to post a quarterly loss of 39 cents per share on revenue of $22.47 billion, with shares rising 0.1% to $248.52 in after-hours trading [1] - Nucor Corp (NYSE:NUE) reported quarterly earnings of $1.73 per share, missing the consensus estimate of $1.91 per share, and sales of $7.687 billion also fell short of the $7.868 billion estimate, resulting in a 3.1% decline in shares to $172.13 [1] - UnitedHealth Group Inc (NYSE:UNH) is expected to report quarterly earnings of $2.10 per share on revenue of $113.82 billion, with shares dropping 8.7% to $321.22 in after-hours trading [1]

Core Viewpoint - The proposed maintenance of the Medicare Advantage payment rates at current levels for next year has disappointed investors, leading to significant stock declines for major insurance companies [1]. Group 1: Payment Rate Impact - The Centers for Medicare & Medicaid Services (CMS) announced that the payment rate for Medicare Advantage plans is expected to increase by only 0.09% in 2027, far below analysts' expectations of a 6% increase [1][2]. - The total payment increase for Medicare Advantage plans in 2027 is projected to be just $700 million, which is minimal compared to the typical payment growth in the tens of billions [2]. - Payment rates are crucial for large insurers like UnitedHealth, CVS Health, and Humana, as the Medicare Advantage program has been a significant growth driver for the insurance industry over the past decade [1][3]. Group 2: Industry Challenges - The profitability of Medicare Advantage plans has been declining due to rising medical costs and insufficient government funding, leading to pressure on insurers [1][3]. - The insurance industry has expressed concerns that the government's payment levels have not kept pace with rising costs, impacting their profit margins [3]. - Analysts had previously predicted a payment increase of 5% to 6% for 2027, and a lower increase could significantly pressure insurance company stock prices [3].

Market Overview - Major U.S. benchmarks finished higher, with the Dow Jones Industrial Average climbing 0.6% to 49,412.40, the S&P 500 adding 0.5% to 6,950.23, and the Nasdaq advancing 0.4% to 23,601.35, driven by anticipation surrounding the earnings of the "Magnificent Seven" stocks, including Microsoft and Meta Platforms [1] USA Rare Earth Inc. - USA Rare Earth shares surged 7.87% to close at $26.72, reaching an intraday high of $32.07 and a low of $25.80, with a 52-week range of $5.56 to $43.98 [2] - The stock's rise follows news of a $1.6 billion investment from the Trump administration, acquiring a 10% stake, which includes 16.1 million shares and warrants for an additional 17.6 million shares at $17.17 each [3] GameStop Corp - GameStop's stock climbed 4.46% to close at $24.01, with a high of $25.01 and a low of $22.95, and a 52-week range of $19.93 to $35.81 [4] - The rally was fueled by investor Michael Burry's disclosure of a fresh stake in the company, adding momentum to a rally driven by CEO Ryan Cohen's insider purchases [4] CoreWeave - CoreWeave shares rose 5.73% to $98.31, hitting an intraday high of $108.65 and a low of $98.05, with a 52-week range of $33.52 to $187 [5] - The increase follows Nvidia Corporation's $2 billion investment in the company, aimed at accelerating AI adoption globally [5] Zoom Communications Inc. - Zoom's stock jumped 11.28% to $95.46, with an intraday high of $95.83 and a low of $86.40, and a 52-week range of $64.41 to $95.83 [6] - The surge is attributed to renewed investor interest in Zoom's early investment in AI startup Anthropic, which analysts believe could be worth $2 billion to $4 billion [6] UnitedHealth Group Incorporated - UnitedHealth's stock fell 1.29% to $351.64, with a high of $354.79 and a low of $347.27, and a 52-week range of $234.6 to $606.36 [7] - The stock fell sharply by 8.6% to $321.30 in extended trading after reports of proposed flat Medicare Advantage rates for 2027, with payments rising just 0.09% [8] - Analysts have revised forecasts ahead of the company's earnings release, with CEO Stephen Hemsley addressing lawmakers about rising healthcare costs [8]

US stock futures mostly moved higher on Tuesday as tech hopes offset Trump worries, with a slide in UnitedHealth (UNH) dragging on the Dow and Wall Street weighing a long-awaited India-EU trade deal. S&P 500 futures (ES=F) rose 0.3%, while those on the tech-heavy Nasdaq 100 (NQ=F) climbed 0.7%. But Dow Jones Industrial Average futures (YM=F) dropped roughly 0.3% on the heels of gains for Wall Street indexes. Trade drama gripped markets, schooled by the Greenland crisis to stay alert even with a packed e ...

Market Overview - US stock futures showed mixed movements with S&P 500 futures rising 0.3% and Nasdaq 100 futures climbing 0.7%, while Dow Jones Industrial Average futures dropped approximately 0.3% due to a decline in UnitedHealth shares [1][4] - The market is reacting to a significant trade deal between the EU and India, which is seen as a counter to US tariff policies [2][12] Company Earnings and Performance - General Motors reported a fourth-quarter earnings beat with revenue of $45.29 billion, slightly below the estimated $45.37 billion, and adjusted EPS of $2.51 compared to the expected $2.28 [7] - GM announced a $6 billion share buyback plan and raised its dividend, projecting a resilient US new vehicle market for 2026 [5][7] - UnitedHealth's shares fell over 15% after a quarterly profit beat, as the proposed Medicare payment rates did not meet Wall Street expectations [4][20] Trade Developments - The EU and India finalized a free trade agreement expected to double EU goods exports to India by 2032, eliminating or reducing tariffs on 96.6% of EU goods exports to India [15][16] - The agreement aims to strengthen economic ties and reduce reliance on US tariffs, with both sides benefiting from the deal [12][13] Health Insurance Sector - Health insurers experienced significant stock declines following a report indicating a minimal increase in Medicare payment rates for 2027, with Humana's stock falling 12.5% and CVS Health's stock dropping over 10% [20][21] - UnitedHealth Group's stock also dropped 8.6% in after-hours trading, contributing to the downward pressure on the Dow Jones [20] Technology Sector - Optimism in the tech sector was bolstered by positive news from memory chipmakers, with key earnings reports from major companies like Meta, Microsoft, and Tesla expected soon [3] - Cloudflare's stock rose 9% following the launch of its new AI assistant, while Salesforce's stock increased by 2% due to a significant contract with the Army [9]

Group 1 - The U.S. government proposed to maintain the payment rates for Medicare Advantage plans at current levels for next year, disappointing investors and causing significant stock declines for major insurance companies [1][2] - Major insurers such as UnitedHealth, CVS Health, and Humana experienced stock drops of 9.3%, 10%, and over 15% respectively following the announcement [1] - The Centers for Medicare & Medicaid Services (CMS) indicated that the payment rate increase for Medicare Advantage plans is expected to be only 0.09% by 2027, far below analysts' expectations of a 6% increase [1][2] Group 2 - The proposed payment rates imply minimal growth for Medicare Advantage insurers, who are already facing profit pressures due to rising medical costs and government funding shortfalls [1][2] - The total payment increase for Medicare Advantage plans in 2027 is projected to be only $700 million, a negligible amount compared to the typical multi-billion dollar growth in the industry [2] - CMS is working on additional policies aimed at improving payment accuracy, ensuring beneficiary choice, and providing reasonably priced insurance coverage for Medicare beneficiaries [2] Group 3 - The Medicare Payment Advisory Commission estimates that by 2025, the government costs for covering individuals through Medicare Advantage plans will increase by 20%, approximately $84 billion [3] - Insurance companies argue that the government payment levels have not kept pace with rising costs, leading to operational challenges in the Medicare Advantage business [3] - Analysts from TD Cowen previously predicted a payment rate increase of 5% to 6% for 2027, warning that a rate increase below 4% could significantly pressure insurance company stock prices [3]

Group 1 - The U.S. government proposed an average increase of only 0.09% in Medicare payments to insurance companies for the next year, leading to a significant drop in stock prices for Medicare insurers [1] - The Centers for Medicare & Medicaid Services (CMS) indicated that the proposal would provide an additional payment of over $700 million for Medicare Advantage plans in 2027 [1] - Major insurance companies such as UnitedHealth, CVS, and Humana saw their stock prices decline by nearly 12% in after-hours trading, while Elevance Health and Molina Healthcare experienced a drop of nearly 5% [1]

Earnings Reports Overview - This week is significant for earnings reports with major companies such as Tesla, Microsoft, Apple, Meta Platforms, UnitedHealth Group, Exxon Mobil, Visa, Mastercard, Chevron, and Caterpillar scheduled to report [1] Implied Volatility Insights - Prior to earnings announcements, implied volatility tends to be high due to market uncertainty, leading to increased demand for options [2] - After earnings announcements, implied volatility typically decreases back to normal levels [3] Expected Price Movements - The expected price range for stocks can be estimated by summing the prices of at-the-money put and call options, using the first expiry date after the earnings date [3] Daily Earnings Reports - **Tuesday**: UnitedHealth Group (UNH) expected move of 5.4%, Boeing (BA) 5.0%, General Motors (GM) 6.1%, UPS 7.1%, NextEra Energy (NEE) 3.9%, Seagate Technology (STX) 11.2% [4] - **Wednesday**: Tesla (TSLA) 6.2%, Microsoft (MSFT) 5.4%, Meta (META) 6.7%, ServiceNow (NOW) 8.0%, Lam Research (LRCX) 8.7%, Starbucks (SBUX) 8.0%, AT&T (T) 4.5%, ASML 7.0%, IBM 6.5% [5] - **Thursday**: Apple (AAPL) 4.4%, SanDisk (SNDK) 14.7%, Altria (MO) 3.5%, Western Digital (WDC) 12.0%, Visa (V) 3.3%, Caterpillar (CAT) 5.9%, Blackstone (BX) 4.7%, Mastercard (MA) 3.9%, Lockheed Martin (LMT) 4.9% [6] - **Friday**: Exxon Mobil (XOM) 3.1%, Verizon (VZ) 4.1%, Chevron (CVX) 2.9% [7] Trading Strategies - Traders can utilize expected moves to structure trades, with bearish traders considering bear call spreads outside the expected range, while bullish traders may opt for bull put spreads or naked puts [7] - Neutral traders might look into iron condors, ensuring short strikes remain outside the expected range [7] Risk Management - When trading options around earnings, it is advisable to use risk-defined strategies and maintain small position sizes to limit potential portfolio impact to 1-3% in case of larger-than-expected stock movements [8]