Industry Overview - The mortgage REIT (mREIT) industry faced volatility in 2025 due to macroeconomic uncertainty, with the average rate on a 30-year fixed-rate mortgage starting at 6.72% and remaining in the upper-6% range for most of the year [1] - By December 2025, the Fed implemented a 25-basis-point rate cut, reducing the average mortgage rate to 6.21%, down from a peak of 7.05% in January 2025 [2][9] - The mREIT industry showed signs of recovery as interest rates stabilized and economic conditions improved, with expectations for further declines in mortgage rates in 2026 [3][4] Market Dynamics - U.S. economic growth is projected to accelerate in 2026, with moderating inflation and decreasing unemployment, contributing to lower mortgage rates and favorable refinancing activity [4] - Mortgage spreads have been narrowing as volatility decreases, which is expected to improve book values for mREITs as asset prices rise [5] Investment Opportunities - Investors are encouraged to consider mREIT stocks such as Two Harbors Investments Corp (TWO), NexPoint Real Estate Finance (NREF), and Ellington Financial Inc. (EFC) for potential strong returns in 2026, given their attractive dividend yields and growth prospects [3][6] - The selection of these stocks was based on criteria including an expected earnings growth rate of over 5% for 2026 and a dividend yield exceeding 10% [7] Company Insights Two Harbors Investments Corp (TWO) - TWO's portfolio is primarily composed of residential mortgage-backed securities (RMBS) with a 71.1% exposure to Agency RMBS as of September 30, 2025 [10] - The company reported a net interest loss of $63.5 million for the nine months ended September 30, 2025, an improvement from a loss of $122.8 million in the prior year [12] - TWO's current dividend yield is 12.01%, and it has raised its dividend once in the past five years, with earnings estimates suggesting year-over-year increases of 114.5% for 2025 and 6.7% for 2026 [12][13] NexPoint Real Estate Finance (NREF) - NREF focuses on originating and investing in first mortgage loans and has seen its net interest income rise to $36.1 million in the first nine months of 2025, up from $6.4 million the previous year [18][19] - The company has a current dividend yield of 13.73% and has increased its dividend three times in the past five years, with earnings estimates indicating year-over-year increases of 2.2% for 2025 and 8.1% for 2026 [19] Ellington Financial Inc. (EFC) - EFC invests in a diverse range of financial assets, including residential and commercial mortgage loans, and has a strong momentum in its securitization platform [21] - The company maintains a disciplined approach to risk management, with a current dividend yield of 11.30% and three dividend increases in the past five years, alongside earnings estimates suggesting year-over-year increases of 25.3% for 2025 and 1.6% for 2026 [23]

Market Developments - Financial markets are experiencing significant events, including a record options expiration and key political developments, which may lead to potential market shifts [2] - Today marks a record "Witching Day" with $7.1 trillion in options contracts expiring, which typically results in increased trading volumes and market volatility [3][7] - Approximately $5 trillion in exposure is linked to the S&P 500 Index, with an additional $880 billion tied to individual stocks, as analysts monitor the S&P 500's ability to maintain the critical 6800-point level [3] Federal Reserve Insights - Federal Reserve Governor Christopher Waller had a strong interview with President Trump for the Fed Chair position, discussing the labor market and potential interest rate cuts [4][7] - Waller has been advocating for rate cuts since July and dissented from the Federal Open Market Committee's decision to hold rates steady [4] Company-Specific Updates - Truist Securities has raised its price target for Tesla Inc. (TSLA) to $444 from $406, reflecting continued analyst confidence in the company following its Q3 performance and prospects for a robotaxi service [5][7] European Central Bank Position - ECB Governing Council member Peter Wunsch announced that the ECB no longer maintains a dovish bias, indicating that interest rates could remain on hold if the current economic outlook persists [6][7] Geopolitical Tensions - Russian President Vladimir Putin issued warnings regarding retaliation for Ukrainian strikes, emphasizing that Russia will respond to threats, particularly concerning Kaliningrad [8]

Market Performance - Equity benchmark indices Sensex and Nifty experienced a surge after four days of decline, driven by a rally in global markets and lower-than-expected US consumer price inflation data for November, which reinforced expectations of further interest rate cuts by the Federal Reserve [1][6] - The 30-share BSE Sensex increased by 447.55 points, or 0.53 percent, closing at 84,929.36, with an intraday high of 85,067.50, up 585.69 points, or 0.69 percent [3] - The 50-share NSE Nifty rose by 150.85 points, or 0.58 percent, to settle at 25,966.40 [4] Sector Performance - Among the 30 Sensex firms, notable gainers included Bharat Electronics, Power Grid, Tata Motors Passenger Vehicles, Asian Paints, Reliance Industries, and Bajaj Finserv [4] - Conversely, HCL Tech, Kotak Mahindra Bank, ICICI Bank, and Sun Pharma were identified as laggards [4] Foreign and Domestic Investment - Fresh foreign fund inflows contributed to the upward movement in equity markets, with Foreign Institutional Investors (FIIs) purchasing equities worth Rs 595.78 crore on Thursday [7] - Domestic Institutional Investors (DIIs) also engaged in buying, acquiring stocks worth Rs 2,700.36 crore in the previous trade [8] Global Market Influence - Global equity markets, including those in Europe and the US, were trading higher, with the US markets closing positively on Thursday, reflecting steady investor sentiment supported by favorable global cues [6] - A recovery in the Indian rupee against the US dollar further bolstered confidence, leading to broad-based buying during the session [7] Commodity Prices - Brent crude, the global oil benchmark, saw a slight decline of 0.40 percent, settling at $59.58 per barrel [8]

Market Overview - Wall Street's main indexes closed higher as a soft inflation report increased expectations for interest rate cuts by the Federal Reserve [7] - The Consumer Price Index report indicated that consumer prices rose less than anticipated in the year to November, contributing to a more favorable outlook for rate cuts [7] - The S&P 500 gained 52.48 points (0.78%) to close at 6,773.91, the Nasdaq Composite rose by 311.60 points (1.37%) to 23,004.92, and the Dow Jones Industrial Average increased by 69.36 points (0.14%) to 47,955.33 [4][7] Economic Indicators - Jobless claims fell last week, reversing a prior surge, suggesting stable labor market conditions in December [7] - An official jobs report indicated that U.S. job growth rebounded in November, with the unemployment rate rising to 4.6% [7] - Traders are now estimating a 58% chance for a dovish policy move by the Fed in March, according to CME's FedWatch Tool [3][7] Company Highlights - Lululemon's stock surged following news that activist investor Elliott acquired over a $1 billion stake in the company [4][7] - Micron Technology's stock jumped after the company forecasted quarterly profit nearly double analysts' expectations due to strong demand related to artificial intelligence [5][7] - Other memory companies, including SanDisk and Western Digital, also saw significant gains, with the Philadelphia SE Semiconductor Index climbing [5][7] - Trump Media & Technology's stock rose after announcing a merger with TAE Technologies in an all-stock deal valued at over $6 billion [6][8]

Group 1: Market Overview - US stocks experienced a significant increase following a cooler-than-expected inflation report, which raised confidence in the economy and expectations for continued rate cuts by the Federal Reserve [1][5] - Major indexes, particularly the tech-heavy Nasdaq Composite, rose more than 1% after the Consumer Price Index (CPI) release [3][8] Group 2: Inflation and Federal Reserve - Consumer prices increased by 2.7% year-over-year, which was lower than the anticipated 3.1% annualized increase, suggesting a more favorable inflation environment [1][5] - The latest CPI data has increased the likelihood of the Fed cutting rates by another 25 basis points by March 2026, as the job market shows signs of weakness [5][6] Group 3: Technology Sector Performance - The technology sector rebounded after a period of weakness, with chip stocks, particularly Micron Technology, seeing a notable rise of up to 14% due to strong earnings and positive guidance [2][8] - Micron's performance has alleviated concerns in the AI sector, where investors have been wary of high valuations [8]

Market Performance - Stocks rebounded strongly on Thursday, with the Nasdaq leading the recovery, jumping 313.04 points or 1.4 percent to 23,006.36 [1] - The S&P 500 advanced 53.33 points or 0.8 percent to 6,774.76, while the Dow closed up 65.88 points or 0.1 percent at 47,951.85 [1] Economic Indicators - The Labor Department reported a slowdown in the annual rate of consumer price growth, with consumer prices in November up by 2.7 percent year-over-year, down from 3.0 percent in September [2] - Core consumer prices, excluding food and energy, also slowed to 2.6 percent in November from 3.0 percent in September, contrary to expectations of remaining unchanged [3] Sector Performance - Semiconductor stocks rebounded significantly, with the Philadelphia Semiconductor Index surging by 2.5 percent, driven by Micron Technology's 10.2 percent increase after better-than-expected quarterly results [6] - Software and networking stocks also showed strength, contributing to the Nasdaq's rise [6] - Airline stocks performed strongly, while energy stocks declined after a previous rally [7] International Markets - In overseas trading, the Asia-Pacific region showed mixed performance, with Japan's Nikkei 225 Index down by 1.0 percent and China's Shanghai Composite Index up by 0.2 percent [7] - Major European markets moved upward, with the German DAX Index increasing by 1.0 percent, the French CAC 40 Index by 0.8 percent, and the U.K.'s FTSE 100 Index by 0.7 percent [8] Bond Market - Treasuries rose in response to the inflation data, leading to a decrease in the yield on the benchmark ten-year note by 3.5 basis points to 4.116 percent [9]

The three candidates interviewed by President Donald Trump so far to replace Federal Reserve Chair Jerome Powell next May share a desire to cut interest rates, but diverge on other aspects of monetary policy and come from different backgrounds. ...

Group 1 - The University of Louisiana System has formed a presidential search committee for the University of Louisiana at Lafayette to guide the search process following the resignation of President Joseph Savoie after 17 years [1] - The committee will include representatives from the UL Lafayette community and key stakeholders, with the first meeting scheduled for January 14 [1] Group 2 - President Donald Trump signed an executive order to expedite the rescheduling of marijuana from Schedule I to Schedule III, aiming to expand cannabis research [2] - The rescheduling process was initially started by former President Joe Biden but remained unresolved when Trump took office [2] Group 3 - U.S. stocks experienced a significant rise following a positive inflation report, which may influence the Federal Reserve's interest rate decisions next year [3] - Micron Technology's strong profit report contributed to a temporary halt in the decline of AI stocks, with the S&P 500 increasing by 0.9% and the Nasdaq composite leading with a 1.5% rise [3] - The Dow Jones Industrial Average rose by 124 points, or 0.3%, indicating overall market strength [3]

Core Viewpoint - The iShares 0-3 Month Treasury Bond ETF (SGOV) has become a favored option for retirees seeking to earn higher yields on cash reserves amidst rising interest rates, providing Treasury Bill exposure with the convenience of an ETF format [2][3]. Group 1: Fund Overview - SGOV operates as a modern cash equivalent, holding ultra-short Treasury securities maturing in zero to three months, continuously rolling over its portfolio as bills mature [3]. - The fund has $64.7 billion in assets and a low expense ratio of 0.09%, making it an attractive option for conservative investors [4][5]. - As of mid-December 2025, SGOV yields approximately 3.85% annually, with monthly dividend payments fluctuating based on short-term rates [4][5]. Group 2: Market Context - The Federal Reserve cut interest rates to a range of 3.5% to 3.75% in December 2025, with further cuts projected for 2026, potentially lowering SGOV's yield [5][7]. - Market forecasts suggest rates may settle between 3% and 3.5% in 2026, indicating a trend of declining yields for SGOV as the Fed normalizes policy [7]. Group 3: Performance Metrics - Over the past year, SGOV achieved a price appreciation of 0.38% and delivered approximately 4.2% in dividend income, resulting in a total return of around 4.5% [8]. - The fund's price has remained stable, trading within a narrow range of $100.38 to $100.72 over the past five months, highlighting its minimal volatility [8]. Group 4: Investor Sentiment - Investors have noted SGOV's advantages in terms of liquidity and shorter-term exposure compared to other fixed income alternatives, making it a favorable choice for retirement planning [9].

Joining us now is Pimco, global economic adviser, former Federal Reserve vice chair Richard Clara. It's great to have you here. Welcome back.>> Yeah, always enjoy it. >> So, how much do you read into this inflation print. >> I think there's some good news here.Obviously, distortions with the shutdown and some seasonals. Uh uh but I think you take the good news when you can can get it. Um and I think it reinforces the message out of the Fed last week, which is inflation is still pretty stubborn, but it's it' ...