Corporate Developments - Meta Platforms Inc. has agreed to a series of electricity deals to power its data centers, positioning itself as the largest buyer of nuclear power among its hyperscaler peers [8] - US-listed shares of Taiwan Semiconductor Manufacturing Co. have increased following the company's strong sales report for December [8] - Qualcomm Inc. shares have declined after Mizuho Securities downgraded the chipmaker from outperform to neutral [8] Market Reactions - Mortgage stocks surged after the president announced a directive for the purchase of $200 billion in mortgage bonds, benefiting companies like LoanDepot Inc., Rocket Cos Inc., and Opendoor Technologies Inc. [7] - Tariff-exposed stocks experienced declines after the Supreme Court did not issue a decision on the legality of President Trump's tariffs, with Deere & Co. dropping 2.54% and Mattel Inc. sliding 3.07% [5][6]

Core Viewpoint - The resilience of the US economy is currently overpowering geopolitical turmoil, leading to a surprising strength in the US dollar despite expectations of a decline due to Federal Reserve interest rate cuts [1][2]. Economic Indicators - Traders had increased their bets against the US dollar, anticipating a decline as the Federal Reserve cuts interest rates, which would incentivize global investors to seek higher returns elsewhere [2]. - The December jobs report revealed a surprising decline in the unemployment rate, which countered weaker-than-expected growth in nonfarm payrolls, contributing to doubts about the extent of future interest rate cuts by the Federal Reserve [4]. Market Performance - The Bloomberg Dollar Spot Index rose for the fourth consecutive day, reaching its highest level since December 10, with a 0.6% increase this week, marking the largest advance since November [5]. - Options positioning has become increasingly positive, with market sentiment being the most bullish since early December [5]. Market Sentiment - The dollar's recent upward movement illustrates the challenges faced by Wall Street forecasters in predicting market directions during the Trump administration, highlighting the volatility and unpredictability of the current economic landscape [6]. - The post-pandemic economy has defied recession fears, with ongoing uncertainties stemming from Trump's trade policies and military threats, further complicating market predictions [7].

Market Overview - Wall Street closed the week on a positive note, with solid but unspectacular jobs data alleviating fears of a sharp labor market slowdown while maintaining expectations for Federal Reserve rate cuts [1] - The S&P 500 and Russell 2000 reached new record highs, with the S&P 500 rising 0.7% to above 6,970 points and the Russell 2000 increasing 1.2% to 2,635 [2] - Blue-chip stocks remained near record levels, with the Dow Jones Industrial Average around 49,555 and the Nasdaq 100 advancing 1% [3] Employment Data - December nonfarm payrolls increased by 50,000, slightly below the expected 60,000, indicating a continued cooling in employment growth [4] - The unemployment rate unexpectedly declined to 4.4% from 4.5%, suggesting potential stabilization in the labor market [4] - Consumer sentiment improved, with the University of Michigan index rising to 54, the highest level since September [4] Federal Reserve Expectations - Investors are nearly fully pricing in the Federal Reserve to keep interest rates unchanged at its late-January meeting, with expectations for two rate cuts later in the year still alive [5] Notable Company Movements - Vistra Corp. shares surged over 13% after securing a 20-year agreement with Meta Platforms Inc. to supply more than 2,600 megawatts of zero-carbon energy from nuclear plants [5] - Intel Corp. shares jumped 10%, reaching their highest levels since March 2024, following positive remarks from President Donald Trump about a meeting with CEO Lip-Bu Tan [6] Commodity Performance - Commodities saw gains, with silver rising 4% to $80 per ounce, gold increasing 0.6% to $4,500 per ounce, and copper climbing nearly 2% [6] - Crude oil was on track for a weekly gain, with WTI crude advancing by 3% on both Thursday and Friday [7] Major Indices Performance - Major U.S. indices showed positive performance on Friday, with the Nasdaq 100 up 1%, S&P 500 up 0.7%, Dow Jones up 0.6%, and Russell 2000 up 1.1% [8] - The Vanguard S&P 500 ETF advanced 0.7% to $638.49, while the Invesco QQQ Trust Series climbed 1.0% to $626.40 [9]

Core Viewpoint - Interest rates are beginning to decline after a period of increases, raising questions about the sustainability of bank dividends in Singapore as net interest margins are expected to compress [1][12]. Group 1: Bank Performance and Dividends - Singapore banks have experienced record profits during the rate hikes, with net interest margins increasing, leading to higher dividends for investors [1][2]. - DBS Group Holdings raised its ordinary dividend to S$0.60 per share in 3Q2025, an 11.1% year-over-year increase, supported by diverse income sources [3]. - Oversea-Chinese Banking Corporation (OCBC) reported a 60% total dividend payout ratio, despite a 9% year-over-year drop in net interest income to S$2.23 billion in 3Q2025 [6][7]. - United Overseas Bank (UOB) declared an interim dividend of S$0.85 per share for 2Q2025, down from S$0.88 the previous year, while assuring that the final dividend for 2025 would not be cut [10][11]. Group 2: Income Sources and Stability - DBS's net interest margin softened by 0.15 percentage points to 1.96% in 3Q2025, with net interest income falling by 6% year-on-year to S$3.6 billion, but total income rose 3% to S$5.9 billion due to strong fee income and wealth management activities [4]. - OCBC's non-interest income grew 15% year-on-year to S$1.57 billion, compensating for the decline in net interest income [7][8]. - UOB's net profit fell by 72% to S$443 million in 3Q2025, attributed to lower net interest margins and increased reserves, yet asset quality remained stable with a non-performing loan ratio of 1.6% [10][11]. Group 3: Future Outlook and Earnings - As interest rates fall, banks will rely more on non-interest income streams such as wealth management and fees, which are less sensitive to rate changes [12][13]. - The ability of banks to maintain dividends will depend on their capacity to generate cash and manage their balance sheets effectively, with strong capital positions being crucial in a declining rate environment [14][16]. - Current evidence suggests that Singapore banks can continue to support dividends despite the challenges posed by falling interest rates [15].

Market Overview - Asian stocks were mostly higher as investors awaited U.S. jobs data and a Supreme Court ruling on President Trump's tariffs [1] - The dollar strengthened as the U.S. Senate advanced a resolution to limit Trump's military actions against Venezuela [2] - Gold prices were slightly lower at approximately $4,470 per ounce, while WTI crude futures gained over 3% due to supply disruption fears [3] Regional Indices - China's Shanghai Composite index rose by 0.6% following a report of accelerated consumer inflation, primarily due to higher food costs [4] - Japan's Nikkei index surged nearly 1% after China assured that export controls on dual-use items would not affect civilian use [5] - South Korea's Kospi remained stable after five consecutive days of gains, while Australia's S&P/ASX 200 increased by 0.2% [6] U.S. Market Performance - U.S. stocks ended mixed, with technology and semiconductor stocks facing selling pressure, while the defense sector saw gains due to Trump's proposed $500 billion increase in defense spending [7] - The Nasdaq Composite fell by 0.4%, marking its first decline in four sessions, while the Dow rose by 0.6% and the S&P 500 finished slightly higher [8]

Market Overview - Asian equities opened higher, with Japan and Australia showing gains while South Korea lagged [1] - The S&P 500 had a flat day, concealing selling pressure in major tech companies like Nvidia Corp [1] - Treasury futures increased, and mortgage-backed securities rallied following Trump's announcement of a $200 billion purchase of mortgage bonds [1][6] Economic Indicators - Investors are anticipating US jobs data, with economists predicting the addition of 70,000 new jobs in December and a decrease in the unemployment rate to 4.5% [4] - The jobs data is expected to provide insights into the Federal Reserve's future interest rate decisions, with markets pricing in at least two quarter-point cuts in 2026 [5] Tariff Developments - The Supreme Court is expected to rule on Trump's tariffs, which could impact hundreds of companies seeking to recover billions in duties paid [5] - The rebound in equities following a slump driven by tariffs faces a critical test from the upcoming court ruling [1] Sector Performance - The Russell 2000 index of smaller US companies has outperformed the Nasdaq 100 by approximately 4 percentage points in the first five sessions of 2026, marking the second-best start to a year on record [1] - There is a noticeable shift of investment from high-valued tech giants to smaller companies, indicating a potential rotation in market focus [1] Commodity Market - The dollar maintained its gains, while oil prices continued to rise amid developments in Venezuela and Iran [6] - Silver prices have retreated from recent highs, while gold remained stable [6] - Mortgage bonds and home-lender stocks experienced a rally due to Trump's initiative aimed at reducing housing costs, with approximately $9 trillion in agency mortgage bonds outstanding [6]

Core Insights - NextEra Energy (NEE) is currently trading above its 200-day simple moving average, indicating a bullish trend and steady share price growth over the past 12 months following earnings beats in the last four quarters [1][8]. Investment Strategy and Performance - The company has a well-structured investment plan aimed at enhancing operations, strategic acquisitions, and expanding its customer base, which includes a significant backlog of clean projects [5][10]. - NEE plans to invest over $74 billion between 2025-2029 to expand its clean and renewable energy capacity, with a focus on adding more than 25 GW of new generation and storage capacity by 2034 [8][11]. - The company's return on equity (ROE) stands at 12.42%, surpassing the industry average of 10.3%, indicating efficient use of shareholders' equity [22]. Market Position and Competitive Advantage - NEE's customer base is predominantly residential (89%), which, combined with its advanced technology and operational capabilities, supports consistent above-average returns [10]. - The economic growth in Florida is driving population growth and increasing electricity demand, further enhancing NEE's competitive position [13]. Financial Metrics and Shareholder Value - The current annual dividend is $2.27 per share, with a yield of 2.89%, which is higher than the S&P 500 composite's 1.35%. The company aims for a 10% annual dividend growth through 2026 [27]. - NEE is trading at a forward P/E ratio of 19.58, which is a premium compared to the industry average of 15.12 [25]. Earnings Estimates and Surprises - The Zacks Consensus Estimate for NEE's 2026 earnings per share indicates a year-over-year growth of 8.25%, reflecting positive earnings momentum [15]. - NEE has consistently surpassed earnings expectations in the last four quarters, achieving an average surprise of 4.39% [19][21].

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) rose by +0.11% on Wednesday, recovering from early losses due to an unexpected expansion in the Dec ISM services index, which increased at its fastest pace in 14 months [1] - The Dec ADP employment change showed an increase of +41,000, which was weaker than the expected +50,000, indicating signs of weakness in the US labor market [3] - The Nov JOLTS report revealed a decline of -303,000 job openings to a 14-month low of 7.146 million, which was below expectations of 7.648 million, further suggesting a weaker labor market [3] Group 2: Federal Reserve and Interest Rate Expectations - The markets are currently pricing in a 12% chance of a -25 basis point rate cut at the FOMC's next meeting on January 27-28, with expectations of a total cut of about -50 basis points by 2026 [4] - The Federal Reserve is increasing liquidity in the financial system by purchasing $40 billion a month in T-bills, which is putting additional pressure on the dollar [5] - Concerns regarding President Trump's potential appointment of a dovish Fed Chair, with Kevin Hassett being the most likely candidate, are also contributing to bearish sentiment for the dollar [5] Group 3: Eurozone Economic Conditions - The euro (EUR/USD) fell by -0.05% on Wednesday, influenced by negative economic news from the Eurozone, including lower-than-expected core consumer price increases and a significant decline in German retail sales [6]

The New Year celebrations continue in the investing world. The S&P 500 (^GSPC) is near a record. The Nasdaq Composite (^IXIC) is near a record. The Dow Jones Industrial Average (^DJI) is knocking on the door of breaking through 50,000 for the first time. "The rally is broadening out — and that’s exactly what you want to see at this stage of the cycle," SlateStone Wealth chief market strategist and Yahoo Finance contributor Kenny Polcari said. "More stocks (think the other S&P 500 names) are participating ...

Economic Indicators - Private sector employment in the U.S. increased by 41,000 jobs in December, which was slightly below the expected increase of 47,000 jobs, following a revised loss of 29,000 jobs in November [2][22]. - Small establishments showed positive hiring at the end of the year, recovering from November job losses, while large employers reduced hiring [3][22]. - The Institute for Supply Management is expected to report a slight decrease in service sector activity, with the services PMI projected to edge down to 52.3 in December from 52.6 in November [23]. Stock Market Performance - The Dow Jones Industrial Average rose by 484.90 points (1.0%) to close at 49,462.08, while the S&P 500 increased by 42.77 points (0.6%) to 6,944.82, both reaching new record closing highs [4]. - Amazon's shares surged by 3.4%, contributing significantly to the Dow's performance, following the announcement of Alexa.com rollout to compete with ChatGPT and Gemini [5]. - The NYSE Arca Computer Hardware Index saw a notable increase of 4.3%, while the NYSE Arca Gold Bugs Index rose by 4.1% due to a sharp increase in gold prices [7]. Commodity and Currency Markets - Crude oil futures fell by $0.36 to $56.77 per barrel after a previous drop of $1.19 [10]. - Gold prices decreased by $44 to $4,452.10 per ounce after a significant rise of $44.60 in the previous session [10]. - The U.S. dollar traded at 156.38 yen, slightly down from 156.62 yen, and was valued at $1.1692 against the euro, compared to $1.1687 previously [10]. Global Market Trends - Asian stocks ended mixed, with China's Shanghai Composite Index marginally higher amid escalating tensions with Japan and weak U.S. data raising hopes for rate cuts [11][16]. - Japanese markets fell sharply due to rising geopolitical tensions, with the Nikkei 225 Index down by 1.1% [15][16]. - European stocks showed mixed performance, with the German DAX Index up by 0.7% while the U.K.'s FTSE 100 Index fell by 0.6% [19].