Core Viewpoint - Kansas City Fed president Jeff Schmid believes inflation remains too high and that cutting interest rates could exacerbate inflation without significantly benefiting the job market [1][3]. Group 1: Economic Conditions - Schmid indicates that the economy is showing momentum, but inflation is still considered "too hot" [1]. - The neutral interest rate has increased, with the current range of 3.5% to 3.75% no longer being very restrictive [2]. - Although there are signs of moderating housing costs and rents, Schmid is cautious about reducing rates until there are more convincing signs of overall inflation decreasing [2]. Group 2: Inflation Concerns - The latest inflation data suggests an inflation rate close to 3%, which remains a significant concern for businesses in Schmid's district [2]. - Schmid expresses concern that cutting rates could lead to a departure from a low and stable inflation environment, affecting household and firm decision-making [3]. Group 3: Federal Reserve Actions - Schmid has dissented in the last two policy meetings regarding rate cuts, preferring to maintain rates to avoid igniting inflation [1]. - The Fed is expected to hold rates steady in the upcoming meeting on January 28, maintaining the current range of 3.5% to 3.75% [5]. - Fed governor Michael Barr stated that interest rates are currently in a good position and that more time is needed to assess the job market and inflation [5].

Group 1 - Retailers are losing confidence in their ability to pass on higher costs to consumers, who are feeling financially strained and unwilling to accept price increases [1][2] - In April, retailers believed they could absorb rising costs and transfer them to consumers, but this sentiment has changed significantly [1] - Consumers are now less willing to spend, feeling exhausted by inflation, contrasting with their willingness to pay in 2022 when they had more disposable income [1] Group 2 - The current economic landscape is characterized by narrow demand, with two main drivers being the artificial intelligence ecosystem and affluent consumers [2]

Core Viewpoint - The Federal Reserve's decision to implement a quarter-point rate cut in December has dissenters, particularly Schmid, who emphasizes that inflation has remained above the Fed's 2% target for over four years, indicating a lack of room for complacency among policymakers [1] Group 1 - Schmid is one of three dissenters regarding the Federal Reserve's recent rate cut decision [1] - Inflation has been above the Fed's target for more than four years, highlighting ongoing economic concerns [1] - Policymakers are urged to remain vigilant and not complacent in their approach to monetary policy [1]

Core Insights - Uber has partnered with grocery chain Kroger to enhance delivery services, adding nearly 2,700 Kroger-owned stores to its platforms, including Uber Eats and Postmates, allowing for same-day delivery across the country [2][3] Group 1: Partnership Details - The collaboration aims to provide customers with more convenience and flexibility in grocery shopping, addressing evolving consumer needs [3] - This partnership follows previous collaborations between Uber and Kroger, including a restaurant meal delivery option announced last year [3][4] - Kroger also has a similar partnership with DoorDash, which covers the same number of stores [4] Group 2: Market Context - The partnership comes at a time when consumers are increasingly concerned about grocery costs, with 56% of surveyed individuals citing food prices as a significant source of stress [5] - Food and beverage costs are projected to increase by 3% in 2025, with grocery prices rising by 2.4% over the past year [6] - Specific food categories have seen varied price changes, with meats, poultry, fish, and eggs rising by 3.9%, while dairy prices have decreased [7] Group 3: Consumer Behavior Trends - Current trends indicate that consumers are planning purchases more carefully, consolidating trips, and seeking value due to inflationary pressures [8] - Grocery spending remains resilient, with shoppers adjusting their buying habits rather than the types of products they purchase [8]

Core Insights - Mortgage rates have fallen to the lowest level in over three years, with the average rate on a 30-year fixed mortgage decreasing to 6.06% from 6.16% last week, down from 7.04% a year ago [1][2] - The decline in mortgage rates has led to an increase in weekly purchase applications and refinance activity, indicating an improvement in housing activity and a positive outlook for the spring sales season [2] - President Trump has ordered the Federal Housing Finance Agency to purchase $200 billion in bonds from Freddie Mac and Fannie Mae to help lower housing costs [2][3] Mortgage Market Trends - The average rate on a 30-year mortgage is at its lowest since September 15, 2022, when it was 6.02% [1] - Freddie Mac's chief economist noted that the drop in mortgage rates is driving a surge in homebuying activity [2] - The Federal Housing Finance Agency has initiated a $3 billion round of bond purchases to support the mortgage market [3] Policy and Regulatory Developments - Trump has proposed banning institutional investors from purchasing single-family homes, citing the impact of high inflation on homeownership accessibility for younger Americans [4] - Large financial institutions, such as Blackstone, have been significant buyers of single-family homes since the 2008 financial crisis [5]

Market Overview - The stock market performance in 2025 has exceeded expectations, continuing a multi-year rally with positive signs for the year ahead [1] - Inflation measures have significantly decreased from 2022 peaks, with December CPI showing a 0.3% monthly increase and a 2.7% annual increase, both aligning with expectations [1] - Core consumer prices rose 0.2% month-over-month and 2.6% year-over-year, marking the slowest annual inflation pace since March 2021 [2] Corporate Earnings and Economic Factors - A weakening U.S. dollar is positively impacting corporate earnings, and Treasury yields have decreased from their highs, creating favorable conditions for stock performance [3] - The earnings outlook remains strong, supported by a healthy U.S. consumer [7] Semiconductor Industry Insights - Semiconductor stocks, particularly Intel (INTC) and AMD (AMD), are experiencing upward momentum due to robust data center demand and tightening memory supply [8] - AMD has shown remarkable performance, with shares rising nearly 80% in 2025, driven by AI server revenue growth and data center dominance [10] - Intel has undergone a significant turnaround, with shares more than doubling from around $20 to nearly $50, supported by foundry progress and emerging AI PC traction [13] Strategic Developments - AMD's CEO highlighted the transformative scale of AI, predicting over 5 billion active AI users in the next five years, and emphasized the company's focus on AI-skilled roles [11] - Intel's narrative has shifted under the Trump administration's focus on domestic chip manufacturing, with a historic deal granting the U.S. government a 10% equity stake in exchange for $8.9 billion in funding [12] - Nvidia's acquisition of a $5 billion stake in Intel aims to foster joint AI infrastructure development, providing Intel with capital for foundry expansion [15] Future Outlook - The AI server market is in its early stages, with multi-year hyperscaler expansions providing visibility for growth [16]

Core Insights - Dave Ramsey criticizes financial fearmongering and misinformation regarding the economy, asserting that the narrative around inflation and mortgage rates is misleading [1] - He presents data showing that current inflation and mortgage rates are significantly lower than historical highs, challenging the perception of economic hardship [1][2] Economic Data - Inflation rates: 3.4% in 2024, 6.2% in 2022, compared to 12.4% in 1980 and 7.4% in 1982 [1] - Mortgage rates: Current rates near 5%, compared to 17.66% in 1982 [1] - Median household income: $83,000, with average household expenses at $78,000, indicating financial stability for many [2] Consumer Behavior - Ramsey argues that the notion of the average American struggling to make ends meet is incorrect, supported by income and expense data [2] - He highlights that 93% of surveyed millionaires maintain a monthly budget, countering the stereotype that budgeting is only for those in financial distress [3] Financial Advice - Criticism of tax strategies that involve illegal practices, such as misclassifying personal expenses as business expenses [4] - Ramsey points out the irrationality of fearing a 5% mortgage while carrying high-interest credit card debt at 22.8% [4]

The S&P 500 was up 0.7%, while the Nasdaq Composite was up 0.9%. The Dow rose 400 points, or 0.8%. A tug-of-war on inflation expectations could be driving the stock market's big swings this week. That's the argument proposed by Macquarie strategists Thierry Wizman and Gareth Berry. In the absence of obvious catalysts to explain some big moves in the market, inflation is certainly a plausible suspect. ...

Group 1: Dollar Performance and Economic Indicators - The dollar is under pressure due to the Fed's liquidity boost, with $40 billion monthly purchases of T-bills starting in mid-December [1] - The dollar is expected to weaken as the FOMC is projected to cut interest rates by approximately -50 basis points in 2026, while the BOJ is anticipated to raise rates by +25 basis points [2] - US weekly initial unemployment claims fell by -9,000 to a 6-week low of 198,000, indicating a stronger labor market than the expected increase to 215,000 [3] Group 2: Market Reactions and Central Bank Policies - The dollar index climbed to a 6-week high, up by +0.36%, supported by better-than-expected US economic news and hawkish comments from Atlanta Fed President Raphael Bostic [4] - The euro fell to a 6-week low, down by -0.36%, as the dollar's strength weighed on it, despite Eurozone industrial production rising by +0.7% month-over-month [5] - The yen is under pressure due to a stronger dollar and dovish signals from the BOJ, with the December PPI easing to +2.4% year-on-year, the smallest increase in 20 months [6][7] Group 3: Precious Metals Market Dynamics - Gold and silver prices are sharply lower, with March silver down -1.36%, influenced by the dollar's strength and easing geopolitical risks in Iran [10][11] - Demand for precious metals is supported by concerns over the Fed's independence and potential influence from the Trump administration, despite Trump stating he has no plans to fire Fed Chair Powell [12] - Central bank demand for gold remains strong, with China's PBOC reserves increasing by +30,000 ounces to 74.15 million troy ounces in December, marking the fourteenth consecutive month of increases [15]

Economic Overview - The Consumer Price Index (CPI) report for December indicates a stabilizing inflation picture in the U.S., suggesting a potential for interest rate cuts in 2026 [1] - The strong start to the fourth-quarter earnings season and ongoing AI momentum have positively influenced U.S. equities as they enter 2026 [1] Investment Strategy - Investors are encouraged to create a winning stock portfolio to capitalize on the favorable market conditions, although selecting outperformers can be challenging due to market complexities [2] - Expert advice from brokers is essential for individual investors to navigate the stock market effectively [3] Broker Recommendations - Brokers favor stocks such as Cardinal Health (CAH), AutoNation (AN), American Airlines (AAL), ArcBest Corporation (ARCB), and Asbury Automotive Group (ABG) due to net analyst upgrades and upward earnings revisions [8] - These stocks are highlighted amid easing inflation and a strong kickoff to Q4 earnings [8] Screening Criteria for Stocks - A screening strategy has been developed to identify stocks based on improving analyst recommendations and upward revisions in earnings estimates over the last four weeks [5] - Key criteria include a low price/sales ratio, significant trading volume, and a market capitalization ranking within the top 3000 [6][9] Company Highlights - **Cardinal Health (CAH)**: A leading healthcare services provider with a projected revenue growth of 16.2% year-over-year for fiscal 2026 and a long-term earnings growth rate of 13.9% [10] - **AutoNation (AN)**: A major automotive retailer expanding its dealer network and digital capabilities, with a 0.4% upward revision in 2026 earnings estimates [12] - **American Airlines (AAL)**: Benefiting from increased air travel demand, but facing challenges from high labor costs and debt levels, with a 7.5% upward revision in earnings estimates [13] - **ArcBest (ARCB)**: A freight transportation company expecting a 42.3% increase in earnings per share for 2026, despite mixed earnings performance in recent quarters [14] - **Asbury Automotive Group (ABG)**: A diversified auto retailer with a focus on digital solutions, achieving an average earnings beat of 8.4% over the last four quarters [15][16]