Market Performance - The S&P 500 index decreased by 0.19% to 6,963.74, while the Nasdaq Composite fell by 0.10% to 23,709.87, and the Dow Jones Industrial Average dropped by 0.80% to 49,191.99, despite lower-than-expected December CPI data [1] Company Movements - Advanced Micro Devices (AMD) and Intel (INTC) experienced gains due to positive analyst sentiment regarding AI-chip demand, while Salesforce (CRM) declined due to competitive pressures, and JPMorgan Chase (JPM) fell after disappointing earnings [2][5] - JPMorgan Chase's earnings were negatively impacted by its new role as the Apple Card issuer, and CEO Jamie Dimon expressed concerns about a proposed 10% cap on credit card interest rates potentially harming the industry and consumer spending [4] Economic Indicators - December inflation data indicated a 0.3% increase in prices, with consumer prices rising 2.7% overall, and core CPI at 2.6%, slightly below expectations, reinforcing speculation that the Federal Reserve may keep interest rates unchanged [3] Analyst Insights - Despite the positive momentum for AI companies like AMD and Intel, there are concerns about the sustainability of this rally, with economist Mohamed El-Erian suggesting that the AI market may be losing momentum [5]

Inflation and Federal Reserve Policy - The Consumer Price Index (CPI) inflation data came in below expectations, indicating that inflation is not accelerating and is moving towards the Federal Reserve's target of 2.0% [1][2] - The overall inflation rate is reported at 2.7% year-over-year, with core CPI at 2.6%, both figures slightly below forecasts [7] - The Federal Reserve is likely to maintain its current interest rate policy in the near term, with a "wait-and-see" approach expected to continue [3][4] Future Rate Cuts and Fed Chair Nomination - Market expectations suggest that the first potential interest rate cut could occur in June, with a 47% probability of a 25-basis-point cut [5] - Louis Navellier predicts at least two additional interest rate cuts in 2026, contingent on the confirmation of Kevin Hassett as the next Fed Chair [6][8] - The nomination process for the next Fed Chair is competitive, with concerns about maintaining the Fed's independence amid political pressures [9][10] Market Valuation Concerns - The CAPE Ratio ended the year at 40, historically indicating negative 10-year real returns when above this level [16][17] - Elevated valuations and narrow market leadership could lead to stagnation in returns, reminiscent of the "Lost Decade" from 2000 to 2009 [18][19] - A shift from a "buy-and-hold" strategy to a selective, "sniper" approach may be necessary to navigate potential market challenges [24] Investment Strategies - The Seasonality Tool developed by TradeSmith identifies specific periods when stocks tend to rise or fall, providing a strategic advantage in volatile markets [20][21] - Staying nimble and opportunistic in investment strategies may be crucial for achieving financial goals in the current market environment [25]

Stocks fell Tuesday after the latest data from the Bureau of Labor Statistics showed inflation held steady in December as prices for goods and services rose 2.7%. ...

Core Viewpoint - President Trump advocates for the Federal Reserve to lower interest rates, citing steady inflation data from December as justification for his position [1][3]. Inflation Data - The Bureau of Labor Statistics reported that the consumer price index (CPI) for December showed a headline inflation increase of 2.7% year-over-year, while core CPI, excluding food and energy, was at 2.6% [2]. - Although inflation remains above the Fed's long-term target of 2%, Trump believes it is low enough to warrant interest rate cuts [3][4]. Federal Reserve's Position - Trump criticized Fed Chair Jerome Powell, suggesting that lower interest rates would benefit the economy and that Powell's inaction would label him as "too late" [3][6]. - The market currently anticipates that the Fed will maintain interest rates in the range of 3.5% to 3.75%, with a 97.2% probability of no changes at the next meeting [12][13]. Political Context - The call for interest rate cuts comes amid a criminal investigation by the Department of Justice into whether Powell misled Congress regarding the Federal Reserve's renovation project [7][9]. - Powell has stated that the investigation is an attempt to pressure the Fed into making policy decisions based on political influence rather than economic evidence [9].

Economic Outlook - St. Louis Fed President Alberto Musalem stated that the US economy is robust, expecting above-potential growth, and advised against an accommodative stance from the Fed [1] - The US December CPI remained unchanged from November at +2.7% year-over-year, while the core CPI also held steady at +2.6% year-over-year, which was below the expected +2.7% [1] Stock Market Performance - The S&P 500 Index closed down -0.19%, the Dow Jones Industrials Index down -0.80%, and the Nasdaq 100 Index down -0.18% on Tuesday [5] - Stocks experienced a brief rise due to easing inflation concerns, but ultimately retreated as software stocks sold off following the release of a new AI tool by Anthropic [3][4] Sector Movements - Energy-producing stocks increased as WTI crude oil rose over +2% to a 2.25-month high, influenced by geopolitical risks and US tariffs on goods from countries doing business with Iran [3] - Software stocks faced declines, with Salesforce down more than -7%, Adobe down more than -5%, and Intuit down more than -4% after the AI tool announcement [12] Earnings and Forecasts - Q4 earnings season is beginning, with S&P earnings growth expected to rise by +8.4%, and +4.6% excluding the Magnificent Seven technology stocks [7] - Cardinal Health raised its full-year adjusted EPS forecast to at least $10.00, exceeding the previous forecast of $9.65-$9.85 [19] International Markets - Overseas stock markets showed mixed results, with the Euro Stoxx 50 up +0.22%, China's Shanghai Composite down -0.64%, and Japan's Nikkei Stock 225 up +3.10% [8]

Group 1 - The document does not contain any relevant information regarding companies or industries [1][2][3][4][5][6]

Core Viewpoint - The president is prioritizing cost reduction in response to voter concerns about the cost of living [1] Group 1 - Voter polling indicates significant worry regarding living expenses [1]

Market Overview - US stocks experienced a decline, with the Dow Jones Industrial Average falling 0.8%, the S&P 500 down about 0.2%, and the Nasdaq Composite dropping roughly 0.1% [1] Company Earnings - JPMorgan Chase reported a quarterly earnings miss, impacted by a $2.2 billion hit to net income from an Apple Card deal, leading to a more than 4% drop in its shares [2] - The earnings season has commenced, with Bank of America, Citigroup, and Morgan Stanley expected to release their results in the coming days [2] Inflation Data - The Consumer Price Index (CPI) report indicated that the annual headline inflation rate remained steady at 2.7%, with a monthly increase of 0.3%, aligning with forecasts [3] - Core consumer prices rose by 0.2% month-over-month and 2.6% year-over-year, marking the lowest annual increase since early 2021 [3] Federal Reserve Outlook - The inflation data is significant following a December jobs report that suggested a cooling labor market, leading traders to firm up bets on the Fed maintaining rates this month, with expectations for a quarter-point cut in June [4] Political and Geopolitical Context - Global central bankers have criticized the Justice Department's investigation of Fed Chair Jerome Powell, viewing it as a threat to the Fed's autonomy [5] - Former President Trump announced a 25% tariff on countries continuing business with Iran, adding geopolitical uncertainty to the market [6]

Core Viewpoint - Spot Gold (XAU/USD) has entered a price-discovery phase, reaching new records around $4,630, indicating a strong uptrend despite recent volatility [1][4][17] Technical Analysis - XAU/USD is currently in overbought territory with a 4-hour RSI around 65, showing signs of bearish divergence, while MACD indicates cooling upside momentum [2][10] - Immediate support is at $4,555, with further support levels at $4,500 and $4,440, while resistance is noted at $4,625–$4,640 and the next target at $4,714 [3][14] - Major institutions project gold prices to reach between $4,450 and $5,050 over the next 12–18 months, with a consensus around $5,000 for 2026 [9][17] Macro Drivers - The current gold price is influenced by US inflation expectations, with consensus predicting a 0.3% month-on-month rise in CPI, keeping year-on-year inflation near 2.7% [4][14] - Global debt levels are at approximately $346 trillion, about 310% of world GDP, which raises concerns about fiat currency stability and increases gold's appeal as a hedge [6][7] Geopolitical Factors - Civil unrest in Iran and new US tariff threats are contributing to increased demand for gold as a safe haven, reflecting a structural premium in XAU/USD [5][17] - The political landscape surrounding the Federal Reserve, including potential charges against Chair Powell, adds to the uncertainty, further supporting gold prices [4][17] Market Dynamics - Central banks and ETFs are driving demand for gold, with annual purchases reaching around 700 tonnes, establishing a structural floor under demand [8][17] - The shift to percentage-based margins for gold futures by the CME indicates a recognition of increased volatility and the need for more collateral, impacting speculative positions [11][10] Equity Market Response - Gold mining equities are reflecting the gold price movement, with companies like Barrick Mining and Newmont showing significant gains as gold prices rise [12][17] - The upcoming earnings reports from mining companies will be critical in assessing how much of the gold rally translates into free cash flow and dividends [13][17]

Economic Indicators - Core consumer prices rose 0.2% month-over-month in December, matching November's pace and below the 0.3% consensus, resulting in a year-over-year increase of 2.6%, slightly under the 2.7% forecast [2] - Headline CPI increased by 0.3% month-over-month and 2.7% year-over-year, aligning with monthly expectations but slightly exceeding annual forecasts, with shelter costs being the largest contributor at 0.4% [2] Central Bank Actions - Global central bank officials, including leaders from the ECB, BoE, BOC, and RBA, issued a statement supporting Fed Chair Jay Powell and emphasizing the importance of central bank independence for economic stability [5] Company Earnings and Guidance - JPMorgan Chase's stock rose after providing optimistic guidance for 2026, with net interest income expectations surpassing consensus and expenses projected to be in line [6] - Delta Air Lines guided 2026 EPS to a range of $6.50–$7.50, slightly below the $7.20 consensus, resulting in a slight decline in its stock [7] - Intel and AMD stocks gained after being upgraded to Overweight by KeyBanc, driven by strong demand for server CPUs amid increasing data center and AI needs [7] Mergers and Acquisitions - Denny's shareholders approved a $620 million buyout by TriArtisan Capital Advisors, which owns TGI Fridays and P.F. Chang's, along with Treville Capital and Yadav Enterprises [8] Industry Challenges - Wells Fargo issued a warning for cable operators, downgrading Charter Communications, Comcast, Altice's Optimum, and Cable One to Underweight, anticipating a loss of approximately 1 million residential broadband subscribers this year due to competition from fixed wireless and fiber [10][11]