Core Viewpoint - The market is currently skeptical about the long-term value of software companies due to rapid advancements in AI technology, despite Nvidia's CEO Jensen Huang's belief in the continued importance of traditional tools in the software industry [2][5]. Company Impact - Major software companies such as Salesforce, Workday, Thomson Reuters, SAP, and ServiceNow are experiencing significant declines in their stock values, attributed to fears of AI disrupting their business models [3][4]. - Anthropic's recent introduction of AI plug-ins for its Claude Cowork agent has further intensified the sell-off in software stocks, leading to double-digit percentage drops in companies like Thomson Reuters and PayPal [4][5]. Market Trends - The overall US Software index has fallen nearly 5%, marking its sixth consecutive decline and returning to levels seen in April [5]. - There is a noticeable shift in market sentiment from initial AI enthusiasm to a more cautious approach, with increasing differentiation among companies based on their resilience to AI disruption [5][6].

Market Overview - Stocks broadly declined, particularly in the technology sector, with the S&P 500 falling by 0.8% and the Nasdaq Composite dropping 1.4% [1] AI Impact on Software Companies - Concerns arose after AI startup Anthropic announced an automated agent capable of performing various tasks, leading to fears that AI tools could disrupt software companies [2] - Analysts noted that Anthropic's AI agent, Claude Code, transitioned from a research preview to a billion-dollar product in just six months, highlighting the rapid pace of AI development [3] Company Performance - Salesforce.com shares fell nearly 7%, while Thomson Reuters dropped 16%, CoStar declined 15%, and the London Stock Exchange Group plunged 12% [3] - Other data-related companies, including Intuit, S&P Global, Equifax, Workday, and Atlassian, experienced declines of around 10% [4] PayPal and Cryptocurrency - PayPal's lackluster earnings and CEO change contributed to a more than 20% drop in its shares [5] - Bitcoin faced significant selling pressure, dropping as much as 6.7% to its lowest level since November 2024, ultimately down more than 2% to around $76,600 [5][6] - Bitcoin has lost over 24% in value over the past year and more than 12% since January 1, reflecting a broader shift away from riskier assets [6] Positive Developments - Palantir shares rose over 6% after reporting earnings that exceeded expectations, indicating continued investor interest in AI-related companies [7] - Energy stocks and consumer staples also saw positive trading activity [7]

Core Viewpoint - Equifax Inc. is identified as a strong investment opportunity despite regulatory pressures, with analysts maintaining positive ratings and price targets for the stock [1][2]. Company Overview - Equifax Inc. is a global data, analytics, and technology company that primarily provides credit reporting, identity management, and workforce verification services [4]. Analyst Ratings and Price Targets - Toni Kaplan from Morgan Stanley reiterated a Buy rating on Equifax with a price target of $269 [1]. - Ashish Sabadra from RBC Capital also reiterated a Buy rating with a price target of $250 [1]. Market Conditions and Growth Projections - Analyst Sabadra sees long-term buying opportunities for credit bureau stocks despite short-term pressures from regulatory concerns [2]. - The fundamentals of the sector are expected to remain strong through 2026, with Equifax projected to achieve 6% to 8% revenue growth and 8% to 11% adjusted EBITDA growth [3]. Regulatory Environment - The company faces short-term stock pressure due to regulatory changes, including the Federal Housing Finance Agency's shift to bi-merge credit reports and the Credit Card Competition Act [2]. - Despite these challenges, there are identified tailwinds such as OBBA, deregulation, lower rates, and modest mortgage recovery that could benefit the sector [3].

Core Viewpoint - The article compares Hackett Group (HCKT) and Equifax (EFX) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Hackett Group has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Equifax, which has a Zacks Rank of 4 (Sell) [3] - HCKT has likely experienced a stronger improvement in its earnings outlook than EFX recently [3] Group 2: Valuation Metrics - HCKT has a forward P/E ratio of 10.83, significantly lower than EFX's forward P/E of 23.71 [5] - HCKT's PEG ratio is 0.98, while EFX's PEG ratio is 2.08, indicating HCKT is more favorably valued in terms of expected earnings growth [5] - HCKT has a P/B ratio of 5.04, slightly lower than EFX's P/B of 5.07, suggesting comparable valuation in terms of book value [6] Group 3: Value Grades - Based on various valuation metrics, HCKT holds a Value grade of A, while EFX has a Value grade of C, indicating HCKT is viewed as more undervalued [6] - HCKT's stronger estimate revision activity and more attractive valuation metrics suggest it is the superior option for value investors at this time [7]

Core Viewpoint - Exponent (EXPO) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for February 5, with expectations of quarterly earnings at $0.47 per share, reflecting a +2.2% year-over-year change, and revenues projected at $128.25 million, up 3.6% from the previous year [3][2]. - The consensus EPS estimate has been revised 4.05% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP of +0.53% indicates a likelihood of Exponent beating the consensus EPS estimate, despite the company holding a Zacks Rank of 3 [12]. - Historical performance shows that Exponent has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +10.00% in the last reported quarter [13][14]. Industry Context - In comparison, Equifax (EFX) is expected to report earnings of $2.05 per share for the same quarter, indicating a -3.3% year-over-year change, with revenues expected to be $1.53 billion, up 7.8% [18]. - Equifax's consensus EPS estimate has been revised down by 1.3% over the last 30 days, and it currently has an Earnings ESP of +1.05% but a Zacks Rank of 4, making predictions of an earnings beat less certain [19].

Group 1 - The article discusses the importance of managing tax payments to avoid penalties, emphasizing that paying at least 90% of the current year's tax or 100% of the previous year's tax can help avoid penalties [1] - It highlights the necessity of reviewing credit reports for errors, advising individuals to contact credit bureaus to dispute inaccuracies [2][3] - The article suggests budgeting for "this year-only" expenses and maintaining an emergency savings account to cover unexpected life events [4][5] Group 2 - It outlines a timeline for financial planning throughout the year, including key dates for tax payments and retirement contributions [7][13][14] - The article emphasizes the importance of reviewing financial allocations and beneficiaries mid-year to ensure they align with current circumstances [20][22] - It encourages individuals to consider education savings plans and charitable contributions as part of their financial strategy [23][25]

Core Insights - Mar Vista Investment Partners reported a strong performance in U.S. equities for 2025, marking the second consecutive year of double-digit gains, with a notable recovery from a bear market dip in April [1] - The Mar Vista U.S. Quality strategy achieved a net-of-fees gain of +0.20% in Q4 2025, underperforming the Russell 1000® Index (+2.41%) and the S&P 500® Index (+2.65%) [1] - Stock selection in communication services, consumer discretionary, and financials sectors positively impacted performance, while information technology, materials, and healthcare sectors detracted from it [1] - The outlook for 2026 suggests a need for balance between strong fundamentals and increasing economic uncertainties [1] Company-Specific Insights - Equifax Inc. (NYSE:EFX) was highlighted in the investor letter, with a one-month return of 0.83% and a 52-week loss of 12.68% [2] - As of January 12, 2026, Equifax's stock closed at $221.63 per share, with a market capitalization of $27.248 billion [2] - Mar Vista divested its position in Equifax during Q4 2025 due to strategic shifts by FICO, which plans to sell credit scores directly to mortgage underwriters, increasing uncertainty in the credit-scoring value chain [3] - The decision to exit the position was influenced by a slower-than-expected recovery in the housing market and a weakened risk-reward profile for the investment [3]

Core Viewpoint - Shares of major credit-reporting companies have declined significantly following criticism from the Federal Housing Finance Agency Director regarding their pricing practices [1][2]. Group 1: Company Performance - Equifax Inc. shares fell by as much as 6%, TransUnion by 6.8%, and Experian by 2.7% during New York trading [1]. - Fair Isaac Corp. also experienced a drop in shares, declining by up to 4.9% [1]. Group 2: Pricing Concerns - The Federal Housing Finance Agency Director, Bill Pulte, expressed confusion over the pricing strategies of credit bureaus, indicating that they are inviting increased scrutiny [2]. - The Mortgage Bankers Association reported that its members anticipate a significant increase in credit reporting costs for 2026, estimating an average rise of 40% to 50% [3]. - This increase marks the fourth consecutive year of price hikes for the tri-merge report, which combines scores from Equifax, Experian, and TransUnion [3]. Group 3: Market Dynamics - The lack of competition in the credit reporting market, along with the requirement for lenders to purchase reports from all three major firms, contributes to rising costs that are ultimately passed on to borrowers [3]. - Pulte has communicated with the CEOs of the credit bureaus regarding these issues, but has noted a lack of responsiveness [4]. - The FHFA is exploring alternatives to FICO scores, such as backing loans scored by VantageScore Solutions LLC, to enhance competition in the home-loan market [4]. Group 4: Analyst Insights - Analyst Jaret Seiberg from TD Cowen stated that whether the bureaus are raising prices or merely passing on higher costs is irrelevant; the focus is on how this issue is being leveraged to address housing affordability [5].

Economic Indicators - The Dec ADP employment change is expected to increase by +48,000, while the Dec ISM services index is projected to slip -0.3 to 52.3 [1] - Nov JOLTS job openings are anticipated to climb by +9,000 to 7.679 million, and Oct factory orders are expected to decline by -1.1% m/m [1] - Q3 nonfarm productivity is expected to rise by +4.7%, with unit labor costs increasing by +0.3% [1] - Initial weekly unemployment claims are projected to increase by 12,000 to 211,000 [1] - Dec nonfarm payrolls are expected to increase by +59,000, with the unemployment rate slipping by -0.1 to 4.5% [1] - Dec average hourly earnings are expected to rise by 0.3% m/m and 3.6% y/y [1] - Oct housing starts are expected to increase by 1.4% m/m to 1.325 million, and building permits are expected to rise by 1.1% m/m to 1.350 million [1] - The University of Michigan's Jan consumer sentiment index is expected to climb by 0.6 points to 53.5 [1] Stock Market Performance - The S&P 500 Index is up +0.26%, the Dow Jones is up +0.27%, and the Nasdaq 100 is up +0.49% [5] - Chipmakers and data storage companies are leading the market higher, with Sandisk up more than +22% and Western Digital up more than +12% [10] - Mining stocks are also performing well, with copper prices reaching a new all-time high [4] - Stocks linked to data-center cooling are under pressure, with Modine Manufacturing down more than -14% [12] Bond Market - The 10-year T-note yield is up by +2 bp to 4.18%, influenced by rising inflation expectations [3][7] - European government bond yields are moving lower, with the 10-year German bund yield down -2.6 bp to 2.844% [8] International Markets - The Euro Stoxx 50 and Japan's Nikkei Stock 225 have reached new record highs, with increases of +0.22% and +1.32% respectively [6]

Economic Indicators - The Dec ADP employment change is expected to increase by +48,000, while the Dec ISM services index is projected to slip -0.3 to 52.3 [1] - Nov JOLTS job openings are anticipated to climb by +9,000 to 7.679 million, and Oct factory orders are expected to decline by -1.1% m/m [1] - Q3 nonfarm productivity is expected to rise by +4.7%, with unit labor costs increasing by +0.3% [1] - Initial weekly unemployment claims are projected to increase by 12,000 to 211,000 [1] - Dec nonfarm payrolls are expected to increase by +59,000, with the unemployment rate slipping by -0.1 to 4.5% [1] - Dec average hourly earnings are expected to rise by 0.3% m/m and 3.6% y/y [1] - Oct housing starts are expected to increase by 1.4% m/m to 1.325 million, and building permits are expected to rise by 1.1% m/m to 1.350 million [1] - The University of Michigan's Jan consumer sentiment index is expected to climb by 0.6 points to 53.5 [1] Stock Market Performance - The S&P 500 Index is up +0.32%, the Dow Jones Industrials Index is up +0.16%, and the Nasdaq 100 Index is up +0.63% [5] - March E-mini S&P futures are up +0.33%, and March E-mini Nasdaq futures are up +0.66% [5] - Chipmakers and data storage companies are leading the market, with Sandisk up more than +12% and Microchip Technology up more than +7% [10] - Mining stocks are also performing well, with copper prices reaching a new all-time high [4][11] Bond Market - The 10-year T-note yield is up by +2 bp to 4.18%, influenced by rising inflation expectations [3][7] - The 10-year breakeven inflation rate has risen to a 1-month high [3][7] - European government bond yields are moving lower, with the 10-year German bund yield down -2.7 bp to 2.843% [8] Company-Specific Developments - Aeva Technologies is up more than +32% after its 4D LiDAR technology was selected for Nvidia's autonomous vehicle platform [13] - OneStream is up more than +25% following news of advanced acquisition talks [13] - Zeta Global Holdings is up more than +6% after entering a strategic collaboration with OpenAI [14] - Vistra Corp. is up more than +3% after agreeing to acquire 10 natural gas-fired power plants for roughly $4 billion [14] - Core Scientific is up more than +2% after an upgrade to buy from neutral [15]