January 30, 2026 09:52 AM EST The Stock Price of Hoka and UGG Maker Deckers Outdoor Is Soaring Today. Here's Why FROM 23 minutes ago A shoemaker's stock is running to its highest point in months Friday. Deckers Outdoor (DECK) shares surged 11% in early trading after the parent company of Hoka running shoes and UGG boots reported better fiscal third quarter results than expected. Entering Friday's session, Deckers Outdoor stock had lost more than half of its value over the past 12 months. Justin Sulliv ...

The markets are discounting the odds at 3% for a -25 bp rate cut at the conclusion of today's FOMC meeting.The risk of another partial US government shutdown is also weighing on the dollar. Senate Democrats threatened to block a government funding deal over Department of Homeland Security/ICE funding after the ICE shooting of an ICU nurse in Minnesota on Saturday. There could be a partial government shutdown when the current stopgap funding measure expires this Friday. In addition, the dollar is being under ...

Currency Market Overview - The dollar index (DXY00) has dropped to a 2-week low, down by -0.84%, primarily due to President Trump's actions regarding Greenland, which have raised fears of trade confrontations with European allies [1] - The Federal Open Market Committee (FOMC) is expected to cut interest rates by approximately -50 basis points in 2026, contributing to the dollar's underlying weakness [3] - The Federal Reserve has begun purchasing $40 billion a month in T-bills, which is increasing liquidity in the financial system and putting additional pressure on the dollar [4] Euro and Yen Performance - The EUR/USD pair has rallied to a 3-week high, up by +0.66%, driven by dollar weakness and positive economic expectations from Germany, where the ZEW survey expectations for economic growth rose to a 4.5-year high of 59.6, exceeding expectations of 50.0 [5] - The USD/JPY pair is down by -0.03%, with the yen gaining strength due to safe-haven demand amid rising trade tensions between the US and Europe, as well as higher Japanese government bond yields, which have reached a nearly 27-year high of 2.359% [7] Economic Indicators - The German Producer Price Index (PPI) for December fell by -2.5% year-on-year, which was weaker than the expected decline of -2.4% and marks the steepest pace of decline in 20 months [6] - Swaps are indicating a 0% chance of a +25 basis point rate hike by the European Central Bank (ECB) at the upcoming policy meeting on February 5 [6]

Core Viewpoint - Realty Income has underperformed compared to the S&P 500 over the past decade, with a total return of 93% versus the S&P 500's 337% [1] Group 1: Performance and Market Conditions - Realty Income's underperformance can be attributed to rising interest rates and the impact of the global pandemic, which temporarily closed many of its properties [2] - The company has averaged a total return of 13.7% throughout its 32-year history, with better performance typically occurring when interest rates decline [5] Group 2: Predictions for 2026 - Realty Income is predicted to outperform the S&P 500 in 2026 due to anticipated significant declines in interest rates, including the 10-year Treasury yield [4] - The company is expected to report $5.5 billion in investments for 2025, with an even larger volume of acquisitions anticipated in 2026 as capital costs become more favorable [6] - A 5% increase in dividends is predicted for Realty Income by the end of 2026, improving from a slower growth rate of 3.5% over the past decade [9]

Core Insights - The potential nomination of Kevin Warsh as the next Fed chair could lead to a less aggressive approach to interest rate cuts compared to his rival Kevin Hassett [2][8] - Betting markets indicate a 60% chance for Warsh's nomination and a 15% chance for Hassett, following Trump's comments favoring Hassett's current position [3][4] - The selection of the new Fed chair is crucial as it will significantly impact monetary policy and the federal funds rate, affecting borrowing costs [5][10] Group 1: Candidates and Their Positions - Kevin Warsh has gained momentum as the front-runner for the Fed chair position, with Trump expressing a desire to keep Hassett in his current role [2][8] - Hassett is viewed as the most aggressive rate-cutter among the candidates, aligning closely with Trump's views on monetary policy [6][14] - Warsh, while advocating for lower rates, is perceived as less dovish than Hassett, indicating a potential moderation in rate-cutting policies [7][8] Group 2: Economic Implications - The new Fed chair will face the challenge of balancing a slowing job market against persistent inflation, which is currently above the Fed's 2% target [10][11] - Fed officials are expected to maintain steady interest rates in the upcoming meeting, with uncertainty surrounding future rate cuts [12][13] - Political pressures from the Trump administration regarding interest rate cuts could undermine the Fed's independence and credibility in managing inflation [13][14]

Currency Market Overview - The dollar index (DXY00) is down slightly by -0.03%, reversing an early advance due to a decline in the Dallas Fed manufacturing outlook [1] - The dollar initially gained strength from stock market weakness, which increased liquidity demand, but later weakened after disappointing manufacturing data [1] Economic Indicators - US November pending home sales rose by +3.3% month-over-month, surpassing expectations of +0.9% [5] - The Dallas Fed manufacturing outlook for December unexpectedly fell by -0.5 to -10.9, against expectations of an increase to -6.0 [5] Federal Reserve and Interest Rates - Markets are pricing in a 19% chance of a -25 basis point rate cut at the FOMC's next meeting on January 27-28 [2] - The Federal Reserve is expected to cut interest rates by about -50 basis points in 2026, contributing to the dollar's underlying weakness [3] Global Central Bank Actions - The Bank of Japan (BOJ) is expected to raise rates by +25 basis points in 2026, while the European Central Bank (ECB) is anticipated to keep rates unchanged [3] - Swaps indicate a 0% chance of a +25 basis point rate hike by the ECB at the next policy meeting on February 5 [7] Market Sentiment and Future Outlook - Concerns regarding President Trump's potential appointment of a dovish Fed Chair are putting additional pressure on the dollar, with Kevin Hassett seen as the most likely candidate [4] - The Fed's recent actions to boost liquidity, including purchasing $40 billion a month in T-bills, are also contributing to the dollar's weakness [4]

Core Viewpoint - Annaly Capital, a mortgage REIT, offers a high dividend yield of 12%, but its volatility raises concerns about its reliability as a dividend stock. Despite this, there are reasons for potential investment in the company. Group 1: Dividend Performance - Annaly recently increased its dividend, signaling positive company performance, although its historical reliability as a dividend stock is questionable [3][5] - The company has maintained its dividend throughout 2025, with earnings available for distribution covering the new dividend in the first three quarters [5] Group 2: Interest Rate Environment - The Federal Reserve's lowering of interest rates is beneficial for Annaly, as it reduces interest expenses and enhances the company's earnings profile [7] - The current housing market is stagnant, with high home prices and interest rates affecting home purchases. Continued rate declines could improve the housing market, positively impacting Annaly's business [9] Group 3: Total Return Focus - Annaly's high yield may mislead investors into viewing it as a reliable dividend stock, but the company's focus is on total return rather than consistent income [10][13] - Since its IPO, Annaly's total return has outperformed the broader market, providing potential diversification benefits for investment portfolios [12]

Core Insights - JPMorgan's shares reached an all-time high of $327.78, driven by optimism regarding the easing rate cycle, stronger U.S. GDP growth, and potential entry into the crypto trading business [1][10] Performance Comparison - Over the past six months, JPMorgan shares have increased by 14.8%, while the S&P Index gained 15.7%. In comparison, Bank of America and Citigroup saw increases of 19.5% and 44.5%, respectively [2] Valuation Metrics - JPMorgan's stock trades at a price-to-tangible book (P/TB) ratio of 3.27X, above the industry average of 3.20X. Bank of America and Citigroup have P/TB ratios of 2.04X and 1.30X, respectively [5] - The Value Score of F indicates that JPMorgan's stock is not considered cheap, suggesting a stretched valuation [5] Business Model Resilience - JPMorgan operates across multiple segments, including consumer banking, commercial banking, investment banking, and wealth management, providing diverse revenue streams that enhance its resilience [11] - The bank benefits from a stable deposit base, with a loans-to-deposit ratio of 56% as of September 30, 2025, allowing for low-cost funding [12] - Approximately 45% of total net revenues come from fee-based income, which enhances stability and reduces reliance on interest-rate dynamics [13] Growth Strategy - JPMorgan is expanding its branch network, opening nearly 150 branches in 2024 and planning to add 500 more by 2027 to strengthen its competitive edge [14] - The bank has consistently delivered industry-leading returns through disciplined risk management and a focus on high-quality lending [15] Profitability Expectations - Despite expected pressure on net interest income (NII) due to declining rates, JPMorgan anticipates NII to be nearly $92.2 billion in 2025 and $95 billion in 2026 [16] - Non-interest income streams from trading, investment banking, payments, and wealth management provide additional earnings stability [17] Leadership and Execution - Under Jamie Dimon's leadership, JPMorgan has emphasized conservatism and capital strength, enabling it to outperform competitors during crises [18] - The bank's strong balance sheet includes total debt of $496.6 billion and cash and deposits of $303.4 billion as of September 30, 2025 [19] Shareholder Returns - JPMorgan has increased its quarterly dividend by 7% to $1.50 per share and authorized a new share repurchase program worth $50 billion [20] - The bank has raised dividends six times in the last five years, with an annualized growth rate of 8.94% [21] Earnings Estimates - The Zacks Consensus Estimate for JPMorgan's earnings in 2025 is $20.32, with a slight decline to $21.03 for 2026, indicating elevated non-interest expense expectations [25] - The consensus for revenue growth suggests increases of 2.8% in 2025 and 3.9% in 2026 [25] Investment Consideration - Despite its premium valuation, JPMorgan's size, diversification, and track record make it a reasonable core holding for a multi-year horizon [29]

Core Viewpoint - The Zacks SBIC & Commercial Finance industry is facing challenges due to declining interest rates, which may lead to margin compression and lower investment income, while asset quality remains at risk from prolonged high rates affecting borrowers' repayment ability [1][5][8]. Industry Overview - The Zacks SBIC & Commercial Finance industry consists of companies that provide financing to small and mid-sized privately held firms, often underserved by traditional banks [3]. - These companies offer customized financing solutions, including senior debt instruments and equity capital, for various transactions such as buyouts and growth initiatives [4]. Key Themes - **Declining Interest Rates**: The Federal Reserve has lowered interest rates to 3.75–4%, which will likely reduce loan yields for many industry players with floating-rate loans, impacting net investment income [5]. - **Loan Origination and Refinancing**: Despite the challenges, loan origination and refinancing activities are expected to improve due to rising demand amid economic growth [6]. - **Asset Quality Concerns**: The industry may experience asset quality deterioration as prolonged high interest rates could hinder portfolio companies' ability to service debt [8]. - **Regulatory Changes**: The 2018 amendment to the Investment Company Act eased leverage limits, allowing companies to increase their debt-to-equity leverage, providing more funding flexibility [9][10]. Industry Performance - The Zacks SBIC & Commercial Finance industry ranks 209 out of over 250 Zacks industries, placing it in the bottom 14%, indicating underperformance in the near term [11][12]. - Over the past year, the industry has collectively lost 13%, while the S&P 500 and Zacks Finance sector have gained 14.2% and 9.7%, respectively [15]. Valuation Metrics - The industry has a trailing 12-month price-to-tangible book (P/TB) ratio of 0.96X, significantly lower than the S&P 500's 12.55X, indicating a substantial discount compared to the broader market [17][18]. Company Highlights - **Ares Capital Corp. (ARCC)**: A specialty finance firm focusing on U.S. middle-market companies, with a market cap of $14.5 billion and total debt of $15.6 billion as of Sept. 30, 2025. The company has seen growth in total investment income and is expected to continue this trend [19][21]. - **Hercules Capital, Inc. (HTGC)**: A specialty finance company providing venture capital to technology and life science firms, with a market cap of $3.3 million and a total investment portfolio valued at $4.31 billion as of Sept. 30, 2025. The company is expected to benefit from rising demand for customized financing [22][24]. - **Runway Growth Finance Corp. (RWAY)**: Focuses on providing senior secured loans to growth-stage companies, with a market cap of $357.4 million and a total investment portfolio valued at $946 million as of Sept. 30, 2025. The company is expected to sustain growth in investment income amid favorable regulatory trends [26][28].

Group 1 - The ETF industry is valued at over $18 trillion, with significant growth and innovation from issuers [1] - Vanguard has launched its first active junk bond ETF, indicating a shift towards active management in the high-yield space [24][28] - There are notable outflows from certain ETFs, including $50 million from the Argentina ETF, reflecting market reactions to political events [19][20] Group 2 - Money market funds have seen increased inflows due to rising interest rates, with yields exceeding 4%, attracting investors seeking yield [3][4] - The market is experiencing a rotation, with expectations that some of the cash in money market funds will return to equities when interest rates decline [7][8] - The growth in crypto ETFs is primarily driven by retail investors, with a significant portion of the market being traced back to retail filings [13][15] Group 3 - Vanguard's new high-yield active ETF aims to outperform the market by selecting individual securities, with a focus on quality and risk management [30][34] - The competitive landscape in the active ETF market is intensifying, particularly with major players like JP Morgan entering the high-yield space [36][37] - The conversion of mutual funds into ETFs is becoming more common, with potential tax advantages for shareholders [22][23]