Core Viewpoint - The Federal Reserve governor Stephen Miran suggested that the Trump administration's initiatives to reduce burdensome regulations for businesses could potentially enable the Fed to lower interest rates further [1] Group 1 - The Trump administration's efforts focus on slashing onerous rules for businesses [1] - These regulatory changes may create an environment conducive to further interest rate cuts by the Federal Reserve [1]

Economic Indicators - The US economy is showing "resilience" according to Minneapolis Fed President Neel Kashkari, who does not see the need for an interest rate cut this month [1] - US MBA mortgage applications increased by 28.5% in the week ending January 9, with purchase mortgage applications up 15.9% and refinancing applications up 40.1% [1] - US November retail sales rose by 0.6% month-over-month, exceeding expectations of 0.5% [2] - The Producer Price Index (PPI) for November increased by 3.0% year-over-year, also surpassing expectations of 2.7% [2] Stock Market Performance - The S&P 500 Index is down 0.75%, the Dow Jones Industrial Average is down 0.46%, and the Nasdaq 100 Index is down 1.22% [5] - Weakness in chip makers and the Magnificent Seven technology stocks is negatively impacting the broader market [4][16] - Energy producers are experiencing gains, with WTI crude oil reaching a 2.5-month high [17] Company-Specific News - Wells Fargo reported Q4 net interest income of $12.33 billion, below the consensus estimate of $12.43 billion, leading to a decline of more than 5% in its stock [19] - Trip.com ADRs fell over 15% following an investigation by Chinese regulators for alleged antitrust conduct [18] - TG Therapeutics shares rose over 9% after reporting preliminary full-year 2025 revenue of $616 million, exceeding the consensus of $606.1 million [20]

Core Viewpoint - The article discusses the moderate inflation data in the U.S. for December, highlighting a significant rise in food prices and stable prices for goods related to tariffs, while also noting a rebound in rent and core inflation in the service sector. The analysis suggests that the Federal Reserve is unlikely to lower interest rates in January due to the current inflation trends and labor market conditions [2][6]. Inflation Data Summary - The U.S. Consumer Price Index (CPI) rose by 2.7% year-on-year in December, aligning with market expectations, while the core CPI increased by 2.6%, falling short of expectations [2]. - Food prices saw a notable seasonally adjusted month-on-month increase of 0.7%, the highest since 2022, driven by rising prices in dairy products (+0.9%), fruits and vegetables (+0.5%), and other household foods (+1.6%) [3]. - Energy prices increased by 0.3% month-on-month, with natural gas prices rising by 4.4%, while gasoline and fuel prices decreased by 0.5% and 1.5%, respectively [3]. Impact of Tariffs and Cost Management - The impact of Trump's tariffs on inflation has been milder than previously feared, as supply chains and retailers absorbed some costs. This has hindered the downward transmission of durable goods prices, making it difficult to pass on costs to consumers [4]. - There is a concern that companies that have previously absorbed costs without raising prices may eventually increase prices, contributing to inflationary pressures [4]. Rent and Housing Market Insights - Rent prices have rebounded, with the Owner's Equivalent Rent (OER) and primary residential rent increasing from 0.1% to 0.3% month-on-month, indicating a return to normal levels [4][10]. - Despite a cooling labor market and reduced rental demand due to immigration policies, rent inflation is expected to remain moderate, with no signs of a significant downturn in rental prices [4]. Service Sector Inflation Trends - Non-rent core service inflation (supercore) rebounded, with a month-on-month increase from 0% to 0.3%, indicating a recovery in service activities following the government reopening [5]. - Prices related to travel, such as airfare (+5.2%) and hotel accommodations (+3.5%), showed strong increases, while communication services experienced significant price drops, particularly in wireless services due to competitive pricing strategies among major carriers [5]. Federal Reserve's Interest Rate Outlook - The moderate inflation data is insufficient for the Federal Reserve to consider another rate cut in January, especially after three rate cuts in 2025 that brought the policy rate close to neutral levels [6]. - The labor market, while cooling, has not deteriorated significantly enough to warrant a rate cut, and there are concerns about the perception of political interference if the Fed were to lower rates prematurely [6].

Trade and Tariffs - President Trump announced a 25% tariff on goods from any country conducting business with Iran, impacting major trading partners like China, the UAE, India, and Turkey [3][4] - China is identified as the top global importer of Iranian crude, which may face increased costs due to the new tariffs [3] Federal Reserve and Interest Rates - Federal Reserve Bank of New York President John Williams indicated there is no urgency for a fourth consecutive interest rate cut, with the next meeting scheduled for the end of the month [5][6] - The Federal Open Market Committee (FOMC) has already reduced the federal funds rate by a cumulative 75 basis points last year, moving towards a neutral monetary policy stance [6] Aldi's Expansion Plans - Aldi plans to open over 180 new stores across 31 states by the end of 2026, celebrating its 50th anniversary in the U.S. [7][8] - This expansion will increase Aldi's total U.S. store count to nearly 2,800, with a target of 3,200 stores by the end of 2028 [8] - Aldi is also expanding its distribution network by 20% with new centers planned in Florida, Arizona, and Colorado over the next three years [9]

Group 1 - The core message indicates that the lending rate for small loans is expected to decrease from 24% to 18% by the end of 2026, and further to the 4 times LPR by the end of 2027 [1] - The market news aligns with the guidelines from the "Comprehensive Financing Cost Management Work Guidelines for Small Loan Companies," but it remains uncertain whether this is a unified requirement or specific to certain regions [1] Group 2 - Internet giants with small loan licenses are significantly impacted by the 4 times LPR, as evidenced by a major company's consumer installment and cash loan products having loan daily interest rates around 0.04%, equivalent to an annual rate of 14.6%, which exceeds the current 4 times LPR [2] - Other major companies primarily using small loan licenses, like a certain tech giant's lending product, also have rates above the 4 times LPR, raising concerns about their ability to retain customers in a competitive landscape [2] - The overall decline in interest rates poses a challenge for maintaining existing customer bases, and increasing the proportion of assisted loans may be a potential strategy, though the future of assisted loan rates post-2027 remains uncertain [2] Group 3 - The impact of the 4 times LPR suggests that small loan licenses may serve more as a compliance tool rather than having substantial operational value, particularly in the consumer finance sector [3] - The broader context of interest rate reductions indicates that all players in the financial ecosystem, including small loans, consumer finance, and banks, are interconnected and face similar challenges [3] - The analogy used implies that if small loan licenses are capped at 4 times LPR, other financial institutions should not be able to operate above this threshold without justification [3]

Market Performance - The S&P 500 rose 0.6%, reaching a new all-time high, while the Dow Jones Industrial Average increased by 237 points (0.5%) and also set a record. The Nasdaq composite led with a 0.8% gain [1][16] - The S&P 500 closed at 6,966.28, the Dow at 49,504.07, and the Nasdaq at 23,671.35 [6][16] Company Developments - Vistra's stock surged 10.5% after signing a 20-year agreement to supply electricity from three nuclear plants to Meta Platforms [1][16] - Oklo's shares jumped 7.9% following a deal with Meta Platforms to secure nuclear fuel and advance its project in Pike County, Ohio [2][16] - Homebuilders and housing-related companies saw strong performance after President Trump announced a plan to lower mortgage rates, with Builders FirstSource rising 12%, Lennar up 8.9%, D.R. Horton climbing 7.8%, and PulteGroup increasing by 7.3% [1][16] - General Motors experienced a 2.7% decline after announcing a $6 billion hit to its results for Q4 2025 due to its pullback from electric vehicles, in addition to a $1.6 billion charge from the previous quarter [5][16] - WD-40's stock fell 6.6% after reporting weaker-than-expected profits, attributed to timing issues rather than demand [6][16] Economic Indicators - The U.S. job market showed mixed signals, with fewer hires in December than expected, but an improved unemployment rate, indicating a "low-hire, low-fire" state [1][16] - Consumer sentiment is reportedly strengthening, particularly among lower-income households, with inflation expectations at their lowest in a year, potentially allowing the Fed more flexibility in cutting interest rates [11][16] Bond Market Insights - The yield on the 10-year Treasury eased to 4.16%, while the two-year Treasury yield rose to 3.53%, reflecting mixed expectations for future interest rate changes by the Fed [9][10][16] - Traders have reduced the likelihood of an interest rate cut at the upcoming Fed meeting to 5%, down from 11% the previous day, but still expect at least two cuts within the year [7][8][16] Broader Market Trends - Smaller stocks in the Russell 2000 index rose 4.6% this week, outperforming the S&P 500's 1.6% increase, indicating a shift in market leadership away from Big Tech and AI stocks [12][16] - International markets also saw gains, with the French CAC 40 climbing 1.4% and Japan's Nikkei 225 increasing by 1.6% [13][16]

Group 1: Economic Indicators - The Canadian economy added 8,200 jobs in December, exceeding economists' expectations, while the unemployment rate rose to 6.8% from 6.5% in November [2] - The increase in job seekers contributed to the higher unemployment rate, indicating a cautious balance in the job market with ongoing job creation but some slack [2] Group 2: Market Performance - The S&P/TSX composite index reached a new record, up 234.29 points at 32,612.93, reflecting positive market sentiment [4] - U.S. stocks also hit record highs, with the Dow Jones industrial average up 237.96 points at 49,504.07, and the S&P 500 index up 44.82 points at 6,966.28, indicating a "bad news is good news" mentality among traders [4][7] Group 3: Company Performance - Aritzia Inc. shares increased by 5% following a strong earnings report, with sales in Canada up 29% year over year, suggesting robust performance in the retail sector [3]

Market Overview - U.S. stocks are rising, with the S&P 500 up 0.5%, the Dow Jones Industrial Average adding 237 points (0.5%), and the Nasdaq composite increasing by 0.7% [1] - The gains follow a mixed U.S. job market report, which may delay interest rate cuts by the Federal Reserve but does not eliminate the possibility [1][2] Job Market Insights - The U.S. Labor Department reported that employers hired fewer workers in December than expected, although the unemployment rate improved [2] - The job market is characterized as being in a "low-hire, low-fire" state [2] Company Performances - Vistra, a power company, surged 11.9% after signing a 20-year electricity supply deal with Meta Platforms [3] - Oklo's stock jumped 12.3% after announcing a deal with Meta Platforms to secure nuclear fuel for its project in Ohio [3] - Homebuilders and housing market companies saw gains following President Trump's announcement to lower mortgage rates, with Builders FirstSource rising 8.5%, Lennar up 5.1%, PulteGroup increasing by 4.9%, and D.R. Horton climbing 4.8% [4][5] Automotive Sector - General Motors experienced a 3.3% drop after announcing a $6 billion hit to its results for Q4 2025 due to its pullback from electric vehicles [6] - The company also reported $1.6 billion in charges from the previous quarter, attributing the decline in EV demand to fewer tax incentives and relaxed fuel-emission regulations [6] Consumer Sentiment - A report indicated strengthening consumer sentiment, particularly among lower-income households, with inflation expectations at their lowest in a year [12] International Markets - Stock markets abroad saw gains, with the French CAC 40 rising 1.3% and Japan's Nikkei 225 jumping 1.6% [13] - Fast Retailing, the company behind Uniqlo, saw a 10.7% increase in stock price after a 34% year-on-year surge in quarterly operating profit [13]

Core Viewpoint - Federal Reserve officials are divided on the extent of interest rate cuts for 2026, with some advocating for steady rates until more data is available on inflation and employment [1] Group 1: Interest Rate Cuts - Fed Governor Stephen Miran is advocating for aggressive interest rate cuts, suggesting a reduction of at least 150 basis points this year to support the labor market [2][3] - Miran describes current monetary policy as restrictive, indicating that underlying inflation is around 2.3%, which allows for further cuts [2] - The Federal Funds Rate currently stands at 3.50% to 3.75%, with a total of 75 basis points cut in 2025 [8] Group 2: Economic Context - There are approximately one million Americans unemployed who could potentially find jobs without triggering unwanted inflation, according to Miran [5] - Fed officials estimate that the long-run neutral rate is between 2.5% and 3%, but can rise to approximately 4.5% to 5% when factoring in inflation [9] - The neutral rate is defined as the interest rate that maintains full employment while keeping inflation stable around the Fed's 2% target [10]

Group 1 - IDFC First Bank has reduced interest rates for savings accounts by up to 200 basis points, effective January 9 [1] - The interest rate for balances between ₹1 lakh and ₹10 lakh has been cut from 7% to 5%, representing a significant reduction for this popular slab [2] - The interest rate for balances below ₹1 lakh remains at 3%, while the slab for ₹10 lakh to ₹10 crore will now earn 6.50%, down from 6.75% [3] Group 2 - The interest rate for balances between ₹10 crore and ₹25 crore remains unchanged at 6%, as well as for amounts up to ₹100 crore at 5%, and 4% for amounts over ₹100 crore [4] - The interest rate cut comes amid challenges for banks in attracting deposits despite strong credit growth, following a 25 basis point cut in the policy repo rate by the Reserve Bank of India [4] - The bank will continue to calculate interest on a progressive basis, with different portions of the balance earning interest at varying slab rates, credited monthly [6]