Economic Overview - The U.S. economy shows signs of cooling inflation and resilient consumer activity, with consumer price growth at a six-month low in December and retail sales rebounding [1] - Investor sentiment is high, indicated by record-high margin debt levels, suggesting increased market risk-taking [1] Inflation Dynamics - Consumer inflation decreased for the second consecutive month in December, with the Consumer Price Index (CPI) at 2.68%, down from 2.74% in November, and a monthly increase of 0.3% [2] - Core inflation slightly increased from 2.63% in November to 2.64% in December, with a monthly rise of 0.2% [2] - Conversely, the Producer Price Index (PPI) rose unexpectedly to 2.95% in November, up from 2.80% in October, indicating potential future consumer inflation [3] Consumer Spending - Retail sales increased by 0.6% in November, surpassing the 0.5% forecast, marking a recovery from a revised decline of -0.1% in October [4] - Core sales, excluding autos, rose by 0.5%, exceeding the projected 0.4% growth, although control purchases rose only 0.3%, below the 0.4% forecast [5] Margin Debt Insights - Margin debt reached a record high of $1.23 trillion in December, marking an eighth consecutive monthly increase and a more than 30% surge over the past year [6][7] - High margin debt levels indicate strong investor confidence but also suggest increased market volatility and risk-taking behavior [7] Market Reactions - The S&P 500 reached a record high before ending the week with a 0.4% loss, while the SPDR S&P 500 ETF Trust (SPY) fell by 0.3% [8] - The S&P Equal Weight Index increased by 0.7% from the previous week [8] Treasury Yields and Fed Outlook - The 10-year Treasury yield finished at 4.24%, and the 2-year note at 3.59%, with a 95% chance that the Fed will hold rates steady at the upcoming meeting [9]

Core Insights - The US dollar ended the previous week softer, influenced by inflation signals, rising Treasury yields, and uncertainty surrounding the Federal Reserve and the White House [1] - Mixed inflation data, with Core CPI undershooting expectations and PPI meeting them, did not significantly alter the Federal Reserve's near-term policy stance [2] - The breakout in the 10-year yield above 4.2% suggests a potential increase in long-term US yields, yet the dollar struggled to gain traction due to resilient equity sentiment and reduced geopolitical fears [3] Currency Performance - The New Zealand dollar led the G10 currencies, supported by strong domestic manufacturing data, while the Canadian dollar benefited from optimism regarding renewed trade engagement with China [4] - European currencies, particularly the Euro, Swiss Franc, and Sterling, performed poorly due to political issues and declining growth momentum [4] - The Yen traded unevenly, influenced by speculation over US-Japan FX intervention and expectations of further Bank of Japan tightening, but overall demand for safe havens remained low [5] Currency Pairs Analysis - GBP/AUD has weakened significantly, with expectations for the trend to continue lower, potentially testing the key level of 1.98820 [6][8] - EUR/NZD has formed a head-and-shoulders pattern, with a baseline around 2.007; a break below this level could lead to a nearly 3% decline, testing the previous key level at 1.96225 [9][10] Market Outlook - Upcoming events, including the Davos summit and US-EU tensions over Greenland, are expected to create volatility in the Euro and Swiss Franc [11] - The acceleration of the equity earnings season, with results from major companies like Netflix and Intel, will shape risk sentiment and influence Dollar-sensitive carry trades [12] - The 10-year yield's movement above 4.2% will be closely monitored, as its trajectory could significantly impact the US dollar's performance against improving global risk appetite [13]

The problem accelerates because your portfolio might not be growing fast enough to support higher inflation adjustments. If your portfolio returns 6% annually but inflation is at 3.5%, your real return is only 2.5%, something many retail investors tend to forget. After withdrawing this inflation-adjusted number for expenses and cost of living, there is less left for the portfolio to compound on.However, if inflation is running at 3.5%, you will then need $41,400 to maintain the same level of purchasing powe ...

Market Overview - U.S. stock markets opened sharply lower on January 20th, 2026, with significant declines in major indexes due to escalating geopolitical tensions and proposed tariffs by President Trump against European nations [1][2] - The S&P 500 futures fell by 1.8%, Dow Jones Industrial Average futures dropped by 1.6% (almost 600 points), and Nasdaq Composite futures slumped by 2.23% [2] - Gold surged by 3% to $4,733 per ounce, while silver jumped over 7% to $95.30, reflecting a flight to safety amid market volatility [2] Upcoming Economic Events - Investors are awaiting the Core Personal Consumption Expenditure (PCE) Price Index release, which is crucial for assessing inflationary pressures ahead of the Federal Reserve's policy meeting [3] - Current projections indicate a 95% likelihood that the Federal Reserve will maintain current interest rates in January [3] Corporate Earnings - The corporate earnings season is ongoing, with major companies like Netflix, Charles Schwab, Johnson & Johnson, Intel, and Visa expected to report their earnings this week [5] - United Airlines Holdings Inc. is projected to report quarterly earnings with expectations of $2.94 per share on revenue of $15.40 billion [6] Major Stock Developments - Netflix and Warner Bros. Discovery announced an amendment to their acquisition agreement, shifting to an all-cash transaction valued at $27.75 per WBD share, with Netflix futures up 1.3% ahead of earnings [6] - BHP Group Ltd. shares fell by 1.65% despite lifting its copper production guidance and setting new operational records [6] - Alibaba Group Holding Ltd. dropped by 2.35% as ByteDance challenges its dominance in China's cloud market [6] - Taiwan Semiconductor Manufacturing Co. Ltd. declined by 1.21% despite plans for a significant U.S. manufacturing expansion [6] - 3M saw a 4.5% decline in pre-market trading despite reporting revenues that exceeded estimates for the fourth quarter [10]

Core Insights - The average American household spent $78,535 in 2024, according to the Bureau of Labor Statistics, indicating a significant financial burden on households as inflation continues to rise despite a reported cooling to 2.7% annually [1][2] - Essential costs, particularly food prices, have increased, with specific items like coffee and beef seeing nearly 20% price hikes, further straining household budgets [1][2] Spending Breakdown - The BLS Consumer Expenditures report categorized household spending across 14 categories, highlighting that a large portion of the average budget is consumed by non-negotiable living expenses [2] - Major spending categories included housing at $26,266, transportation at $13,318, and food at $10,169, with additional costs for insurance, healthcare, and other essentials [6] Income Analysis - The mean personal income in 2024 was reported at $67,080, but this figure is skewed by high earners, while the median personal income was significantly lower at $45,140, providing a more accurate representation of typical earnings [3][4] - For full-time workers, the median weekly earnings were $1,214 in Q3 2025, translating to an annualized income of about $63,128, which helps explain the disparity between median personal income and median worker earnings [5]

Economic Preparedness - A significant portion of Americans feel unprepared for current financial challenges, with only 42% feeling ready to handle these issues, while over two-thirds express concern that the economy may derail their long-term goals [1] - High inflation, elevated interest rates, and tariffs are contributing to the financial strain felt by households [1] Financial Advisory Impact - Individuals with financial advisors report feeling twice as prepared for financial challenges compared to those without [2] - Nearly 60% of people with an advisor feel prepared for current financial pressures, while only 30% of those without an advisor share this sentiment [5] - Trust in financial advisors is a key factor, with 39% of individuals citing trust in their advisor's experience as a primary reason for seeking professional help [7] Financial Planning Trends - A growing demand for financial planning is evident, with 78% of respondents considering how to manage their money amid high inflation, and 77% adhering to budgets more closely due to rising prices [4] - Approximately 62% of individuals have postponed major purchases, while 52% report having a financial plan that contributes to their sense of security [4] - About half of Americans plan to cut discretionary spending, increase savings, or adjust investments this year, indicating a shift towards more conservative financial strategies [4] Portfolio Adjustments - Individuals with financial advisors are more proactive in adjusting their portfolios, with 54% planning changes compared to 36% of those without professional support [6]

Market Overview - Wall Street's major equity averages closed slightly lower, with power suppliers like Talen Energy (TLN) and Constellation Energy (CEG) leading the declines, dropping over -11% and -9% respectively [1] - Mosaic (MOS) fell over -4% after weak preliminary Q4 results, while J.B. Hunt Transport Services (JBHT) reported weaker-than-expected Q4 revenue, leading to a decline of more than -1% [1] - On a positive note, Micron Technology (MU) rose over +7% after a director purchased approximately $7.8 million worth of shares [1] Economic Data - U.S. industrial production rose +0.4% month-over-month in December, exceeding expectations of +0.1%, while manufacturing production unexpectedly increased by +0.2% against an expected decline of -0.2% [6] - The upcoming U.S. core personal consumption expenditures (PCE) price index, a key inflation gauge, is highly anticipated, especially since it was delayed due to a government shutdown [9] Corporate Earnings - The fourth-quarter corporate earnings season is heating up, with major companies like Netflix (NFLX), Intel (INTC), and Johnson & Johnson (JNJ) expected to report. S&P 500 companies are projected to see an average earnings increase of +8.4% for Q4 compared to the previous year [11] International Developments - European equities faced downgrades to Neutral by Citi strategists due to renewed transatlantic tensions, particularly related to President Trump's tariff threats against European nations opposing his Greenland acquisition bid [14] - In Japan, concerns over public finances are affecting market sentiment, with long-term government bond yields reaching record highs amid speculation about potential consumption tax cuts [19]

Core Insights - Deposit account rates are declining, but competitive returns on certificates of deposit (CDs) can still be locked in, with the best CDs offering rates above 4% [1] Group 1: Current CD Rates - The best short-term CDs (six to 12 months) currently offer rates around 4% APY, with Marcus by Goldman Sachs providing the highest rate of 4% APY on its 1-year CD as of January 20, 2026 [2] - CDs generally offer significantly higher rates than traditional savings accounts, making them an attractive option for savers [2] Group 2: Historical Trends - CD rates were relatively high in the early 2000s but began to decline due to economic slowdowns and Federal Reserve rate cuts, with average one-year CDs at around 1% APY by 2009 [3] - The trend of falling CD rates continued into the 2010s, with average rates for 6-month CDs dropping to about 0.1% APY by 2013 [4] - A slight improvement in CD rates occurred between 2015 and 2018 as the Fed gradually increased rates, but the COVID-19 pandemic led to emergency rate cuts, causing new record lows in CD rates [5] Group 3: Recent Developments - Following the pandemic, inflation prompted the Fed to hike rates 11 times between March 2022 and July 2023, resulting in higher APYs on savings products, including CDs [6] - As of September 2024, the Fed began cutting the federal funds rate, leading to a steady decline in CD rates from their peak, although they remain high by historical standards [7] Group 4: Understanding CD Rates - Traditionally, longer-term CDs offered higher interest rates, but the current highest average CD rate is for a 12-month term, indicating a flattening or inversion of the yield curve [8] - When choosing a CD, factors such as goals, type of financial institution, account terms, and inflation should be considered to ensure the best fit for individual needs [9]

Market Outlook - Marc Faber predicts a correction in the stock market, citing a "colossal bubble" in residential real estate as a significant concern for the middle class [1] - Faber highlights that the U.S. stock market is near all-time highs, indicating excessive investor behavior and leverage as warning signs of a bubble [2] - He anticipates a significant breakout in interest rates, which could negatively impact the stock market, regardless of whether rates rise or fall [3][4] Economic Concerns - Faber expresses concern over decades of money printing and inflation, which he believes have led to inflated asset prices [4] - He argues that current interest rates are not high in real terms, with the 10-year Treasury yielding around 4%, while he believes the actual cost of living inflation is between 6% and 12% [3] Investment Preferences - Faber advocates for holding precious metals like gold, silver, and platinum as safe-haven assets during economic turmoil [7][8] - He notes that despite the recent popularity of gold, most individuals still hold a minimal percentage of gold in their total assets [9] - High-dividend stocks are favored by Faber, particularly those with yields of 7% to 10%, as they can provide significant returns through compounding [12][13] Alternative Investments - Faber emphasizes the importance of diversification, suggesting that alternative assets, such as art, can help reduce risk and provide returns during market stress [16][17] - The art market is highlighted as a scarce and valuable investment option, with historical performance outpacing the S&P 500 since 1995 [17][18]

Economic Overview - Donald Trump was re-elected as president in 2025, introducing new economic plans affecting trade, immigration, and the federal workforce [1] - Economic uncertainty has impacted consumers, job seekers, and small to midsize businesses due to potential policy changes [1][2] - The effective tariff rate has reached its highest level in decades, significantly affecting trade dynamics [15] Job Market - The US added only 584,000 jobs in the past year, marking the lowest job growth outside a recession since 2003 [5] - Federal employment decreased by 9% year-over-year, driven by efforts to increase government efficiency [11] - Manufacturing employment declined by 0.5% from the previous year, continuing a trend of job losses in the sector [13] Consumer Spending - Despite economic uncertainty, consumer spending remains strong, characterized by a "K-shape" recovery where wealthier individuals are spending more while lower-income households are cutting back [20] - Spending has been primarily driven by high-income individuals and those with assets, such as homeowners and stock market investors [21] Inflation and Economic Growth - Inflation has decreased from a peak of about 9% in 2022 but remains above the Federal Reserve's target of 2% [18] - Real GDP showed growth in the second and third quarters of 2025 after a decline in the first quarter, indicating resilience in the economy despite job market challenges [9][8] - The jobless expansion is expected to continue due to demographic shifts and reduced net migration affecting the labor supply [9][10]