Core Insights - The article emphasizes the importance of reviewing investment plans for 2026, highlighting factors such as tariffs, interest rates, and the AI boom that significantly impacted investments in 2025 [1] Investment Plan Overview - An investment plan tailored for the average American was created, considering a median income of $62,192 per year for full-time workers [2] - Recommendations include building an emergency fund and paying down debt before making substantial investments, along with setting goals and establishing a time horizon [3] Recommended Investment Allocation - The suggested core portfolio allocation for 2026 includes: - U.S. Stocks: 45% (Vanguard Total Stock Market - VTI) for long-term growth - International Stocks: 15% (Vanguard Total International - VXUS) for global diversification - U.S. Bonds: 25% (Vanguard Total Bond Market - BND) for stability and income - REITs/Real Estate: 10% (Vanguard Real Estate - VNQ) as an inflation hedge - Cash/Treasury bills: 5% for liquidity and safety [4][5] Monthly Investment Plan - A monthly investment plan is proposed with a contribution of $900, or approximately 17% of income, allocated as follows: - 401(k) – S&P 500 Index: 40% ($360) - Roth IRA – Target-Date 2060 Fund: 35% ($315) - Brokerage – International ETF (VXUS): 10% ($90) - Brokerage – REIT (VNQ): 10% ($90) - High-Yield Savings/T-Bills: 5% ($45) [6][7] 2026 Economic Outlook - Key economic trends to monitor in 2026 include: - Interest rates may decline by mid-2026, positively affecting stocks and bonds - Inflation is expected to stabilize between 2.5% and 3% - Real estate may slowly rebound as mortgage rates ease - AI, clean energy, and infrastructure are identified as key growth sectors [8][9]

Geopolitical Developments - The U.S. launched a military strike on Venezuela, extracting President Nicolás Maduro to face criminal charges in the U.S. [2] - President Trump stated that the U.S. would "run" Venezuela until an orderly transition is possible and that U.S. oil companies would rebuild Venezuela's oil infrastructure [2][3] Market Reactions - Investors are expected to closely monitor developments in Venezuela and seek more details from the Trump administration, particularly regarding the oil market, which may experience volatility [3] Employment and Economic Data - The Bureau of Labor Statistics is set to release the December jobs report, which could influence interest rates [6] - Federal Reserve officials indicated that a weakening labor market might lead to more interest rate cuts, with upcoming reports on job openings, private sector hiring, and jobless claims providing insights into the labor market [7] Corporate Earnings Reports - Applied Digital, a data center operator, will report on the AI industry, with investors looking for signals of strong AI spending [9] - Constellation Brands, Tilray Brands, Albertsons Companies, CalMaine Foods, and Simply Good Foods are among the companies reporting earnings this week, providing insights into consumer spending levels [10][11]

Core Insights - National average rates for home equity lines of credit (HELOCs) and home equity loans (HELs) are currently below 8%, marking the lowest levels in over 36 months [1] - The average HELOC rate is 7.44% and the average home equity loan rate is 7.59%, based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio of less than 70% [2] - Homeowners with low primary mortgage rates and significant equity in their homes are in a favorable position to access their home equity without losing their advantageous mortgage rates [3][12] Market Overview - The Federal Reserve estimates that homeowners have approximately $36 trillion in equity locked in their homes, indicating a substantial opportunity for second mortgages like HELOCs and HELs [4] - Interest rates for home equity products are distinct from primary mortgage rates, often based on an index rate plus a margin, with the current prime rate at 6.75% [5] Product Features - HELOCs typically offer variable interest rates, which can fluctuate, while HELs generally provide fixed rates throughout the loan term [6][7] - Lenders have flexibility in pricing second mortgage products, making it beneficial for consumers to shop around for the best rates [6] - The best HELOC lenders provide low fees, fixed-rate options, and generous credit lines, allowing homeowners to utilize their equity as needed [8] Current Offers - LendingTree is currently offering a HELOC APR as low as 6.36% for a credit line of $150,000, although rates can vary significantly based on creditworthiness [9][11] - Monthly payments for a $50,000 HELOC at a 7.50% interest rate would be approximately $313 during the 10-year draw period, but payments may increase during the repayment period due to variable rates [13]

Group 1 - The dollar index rose by +0.15% on Friday, driven by weakness in the euro and yen, which fell to 1.5-week lows against the dollar [1] - The US Dec S&P manufacturing PMI remained unchanged at 51.8, aligning with expectations [1] - The markets are pricing in a 15% chance of a -25 basis point rate cut at the FOMC's next meeting on January 27-28 [2] Group 2 - The dollar is under pressure as the Fed increases liquidity by purchasing $40 billion a month in T-bills, which began in mid-December [3] - Concerns about President Trump's potential appointment of a dovish Fed Chair are bearish for the dollar, with Kevin Hassett seen as the most likely candidate [3] - The Eurozone Dec S&P manufacturing PMI was revised downward by -0.4 to 48.4 from a previously reported 49.2, contributing to bearish sentiment for the euro [4] Group 3 - The Eurozone Nov M3 money supply increased by +3.0% year-on-year, surpassing expectations of +2.7% year-on-year, marking the highest growth in four months [5] - Swaps indicate a 0% chance of a +25 basis point rate hike by the ECB at the next policy meeting on February 5 [5] - The USD/JPY rose by +0.08% as the yen slid to a 1.5-week low against the dollar, influenced by dollar strength and higher T-note yields [5]

Market Overview - Trading may be subdued on the first trading day of 2026, with early signs from U.S. Futures Index suggesting a positive opening for Wall Street [1] - Asian shares finished lower, while European shares are mostly trading up [1] - The dollar had a weak start to 2026, oil prices increased, and gold jumped nearly 1.5 percent [1] U.S. Futures and Major Averages - As of 7.30 am ET, Dow futures were up by 196.00 points, S&P 500 futures increased by 40.00 points, and Nasdaq 100 futures rose by 245.75 points [2] - On the previous trading day, major U.S. averages ended lower: Dow fell by 303.77 points (0.6 percent), Nasdaq decreased by 177.09 points (0.8 percent), and S&P 500 declined by 50.74 points (0.7 percent) [2] Economic Indicators - The PMI Manufacturing Final for December is expected to be released at 9.45 am ET, with a consensus of 51.8 [3] - Construction Spending for November is anticipated at 10.00 am ET, with a consensus of 0.0 percent, compared to an increase of 0.2 percent in October [3] - The Fed Balance Sheet for the week will be published at 4.30 pm ET, with the previous level at $6.581 trillion [3] Asian Market Performance - Asian stocks surged, although trading volumes were thin due to holidays in Japan, China, and New Zealand [4] - Hong Kong's Hang Seng index increased by 2.76 percent to 26,338.47, while the Kospi average climbed by 2.27 percent to 4,309.63 [4] - The Australian benchmark S&P/ASX 200 rose by 0.15 percent to 8,727.80, and the broader All Ordinaries index settled 0.20 percent higher at 9,036.60 [4] European Market Performance - European shares are trading mostly higher, with the CAC 40 Index of France up by 26.44 points (0.32 percent) [5] - The German DAX increased by 53.45 points (0.22 percent), and the U.K. FTSE 100 Index gained 42.62 points (0.43 percent) [5] - The Swiss Market Index added 26.89 points (0.20 percent), while the Euro Stoxx 50 Index rose by 34.15 points (0.59 percent) [5]

Core Insights - The article discusses the perspectives of companies on artificial intelligence, interest rates, and economic pressures [1] Group 1: Artificial Intelligence - Companies are increasingly integrating artificial intelligence into their operations to enhance efficiency and drive innovation [1] - The adoption of AI technologies is seen as a critical factor for maintaining competitive advantage in the market [1] Group 2: Interest Rates - Companies are closely monitoring interest rate trends as they impact borrowing costs and investment strategies [1] - Rising interest rates are expected to influence corporate financing decisions and overall economic growth [1] Group 3: Economic Pressures - Economic pressures, including inflation and supply chain disruptions, are affecting company performance and strategic planning [1] - Companies are adapting their business models to navigate these challenges and sustain profitability [1]

Core Insights - The article discusses the current state of money market accounts (MMAs) and highlights the importance of earning competitive rates on savings as interest rates decline following recent Federal Reserve rate cuts [1][4]. Group 1: Current MMA Rates - The national average interest rate for money market accounts is 0.58%, but top rates can exceed 4% APY, comparable to high-yield savings accounts [3][8]. - Some banks are offering MMA rates above 4.50%, although rates above 7% are not available in the current market [8][9]. Group 2: Federal Reserve Rate Cuts - The Federal Reserve maintained a target range for the federal funds rate of 5.25%–5.50% until September 2024, when it cut the rate by 50 basis points, followed by additional cuts in November and December [4][5]. - As of December 2025, the federal funds rate stands at 3.50%–3.75%, leading to a decline in deposit account rates [5]. Group 3: Considerations for MMA - Money market accounts provide liquidity and easy access to funds, making them suitable for savers with short-term goals or those building an emergency fund [6][7]. - They are appealing to conservative savers due to FDIC insurance and the inability to lose principal, although riskier investments may be necessary for long-term savings goals [7].

Core Insights - Dividend Kings are stocks that have increased dividends for 50 or more consecutive years, providing stability and reliability for long-term investors. With easing inflation, certain Dividend Kings may perform particularly well [1]. Group 1: Federal Realty Trust (NYSE: FRT) - Lower inflation could lead to a higher valuation for Federal Realty Trust, as REITs are sensitive to interest rates, which are influenced by inflation. A recent Consumer Price Index report indicates easing inflation, which may benefit Federal Realty Trust shares if the trend continues [3]. - If lower inflation results in the Federal Reserve lowering interest rates, Federal Realty Trust could experience a rerating. The current forward dividend yield is 4.42%, compared to a historical range of 3% to 4% when interest rates were lower, suggesting potential for moderate valuation expansion [4]. - Easing inflation could also positively impact the retail sector, which is crucial for Federal Realty Trust's operations, potentially increasing its net operating income and allowing for improved dividend growth if cash flow enhances [5]. Group 2: Hormel Foods (NYSE: HRL) - Hormel Foods has a history of 60 consecutive dividend increases, but recent years have seen weak dividend growth due to high inflation affecting profitability. A return to lower inflation could enhance earnings, potentially driving dividend growth and share price appreciation [6][7]. Group 3: Target (NYSE: TGT) - Lower inflation may improve the prospects for a successful turnaround for Target, as easing inflationary pressures could positively influence the company's performance [6].

Group 1: Federal Reserve Interest Rate Policy - The Federal Reserve is considering cutting interest rates again in 2026, but the impact on consumer borrowing costs will vary [1] - Credit cards and high-yield savings accounts are more sensitive to Fed policy, while long-term products like 30-year mortgages may not see immediate reductions [1][3] - The rates that consumers pay depend significantly on their credit history, with higher rates for those with lower credit scores [2] Group 2: Consumer Borrowing Costs - Lower Fed rates do not provide uniform relief across consumer finances, affecting borrowing, saving, and refinancing strategies [3] - Credit card APRs are currently above 20%, significantly higher than the average of 15% in early 2022, reflecting lenders' risk assessments [4] - Auto loan delinquencies increased to nearly 3% in Q3, indicating challenges for consumers amid rising car prices [7][8] Group 3: Market Outlooks - Credit card executives are optimistic about improving credit performance, suggesting a potential easing of lending standards [6] - Auto loan rates may take longer to decrease due to ongoing consumer risk concerns and economic conditions [9] - Deposit rates are adjusting more quickly, with high-yield savings accounts seeing reductions from 6% to 4.18% for 1-year CDs [10][11] Group 4: Mortgage Rates - Adjustable-rate mortgages may decrease, but fixed-rate mortgages could remain stable or even rise due to their correlation with the 10-year U.S. Treasury yield [13] - The 10-year yield has struggled to drop below 4%, limiting the decline in mortgage rates and disappointing potential homebuyers [16]

Core Insights - Home equity lines of credit (HELOCs) and home equity loans (HELs) are concluding 2025 at their lowest rates, making monthly payments more affordable for homeowners [1] - The national average monthly HELOC rate is currently 7.44%, while the average rate for home equity loans is 7.59% [2] - Homeowners have a record amount of equity, nearly $36 trillion, which is the highest ever reported, providing a significant opportunity for accessing home value [3] Interest Rate Dynamics - HELOC and HEL rates are distinct from primary mortgage rates, typically based on an index rate plus a margin, with the current prime rate at 6.75% [4] - Lenders have flexibility in pricing second mortgage products, and rates can vary based on credit score, debt levels, and home value [5] - Home equity loans generally do not have introductory rates, providing a fixed rate throughout the repayment period [6] Shopping for HELOCs and HELs - Homeowners can retain their low-rate primary mortgage while accessing home equity through HELOCs or HELs, which can be used for various financial needs [7] - FourLeaf Credit Union is currently offering a HELOC rate of 5.99% for the first 12 months, which will convert to a variable rate of 7.25% [8] - It is essential to compare fees and repayment terms when selecting lenders for HELOCs and HELs [9] Current Market Conditions - The national average for HELOCs is 7.44% and for home equity loans is 7.59%, serving as benchmarks for consumers [10] - Considering a HELOC or home equity loan now is advisable, as homeowners can utilize cash for improvements without losing their favorable primary mortgage rates [11] - A $50,000 HELOC at a 7.50% interest rate would result in a monthly payment of approximately $313 during the draw period, but rates are typically variable [12]