General Market News

BCA Research has identified several potential 'black swan' events that could shock global markets, including Iran regime collapse causing oil price spikes, Chinese tech breakthroughs challenging U.S. valuations, and Russia-NATO conflicts. The firm assigns varying probabilities to these scenarios and suggests portfolio adjustments including holding cash and emerging market stocks while considering diversification away from U.S. assets if China stimulates its economy.

• An Iranian regime collapse could eliminate OPEC and Russia's spare oil capacity, potentially driving oil prices up more than 3% short-term and 10% over three and 12 months, with BCA estimating a 38% probability of this shock occurring
• A China tech breakthrough similar to January's DeepSeek moment could pressure valuations of major U.S. tech stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla), with BCA assessing a 50% probability of a bubble bursting
• If Russia seized NATO territory and the U.S. refused to aid allies, 20% of U.S. economic output could be at risk if Taiwan electronics shipping halted, potentially impacting long-term treasuries held by institutions

The Nasdaq 100 experienced an unexpected correction, dropping to 24,954 on Tuesday after peaking at 25,873 on January 13, but technical analysis suggests the bullish trend remains intact. Elliott Wave analysis now indicates the index is forming an ending diagonal pattern rather than a simple impulse wave, with a target around 27,000 contingent on holding above 24,647. The revised count allows for a 3rd of a 3rd wave rally to approximately 26,900-27,400 if the index breaks above the January 13 high.

• The index dropped to 24,954, reaching the 76.4% retracement level of the December-January rally, invalidating the immediate 3rd wave scenario but maintaining critical support levels
• Technical pattern has shifted to a larger ending diagonal formation (3-3-3-3-3), with the 3rd wave typically targeting the 27,090-27,380 zone based on 123.6-138.2% extension ratios
• Key warning levels for bulls are set at 25,602, 25,400, 25,086, 24,647, and 23,854, with serious concern if price falls below this week's low of 24,954

Small-cap stocks are dramatically outperforming large-cap equities in early 2026, with the Russell 2000 up over 10% while the S&P 500 has gained only about 1% and the Magnificent Seven are down 2%. The Russell 2000 is on track for its longest outperformance streak since 1996, marking a sharp reversal from 2025 when large caps dominated. However, analysts caution this rotation may not be sustainable, citing seasonal patterns and the upcoming earnings season as critical tests.

• The Russell 2000 is outperforming the S&P 500 for a potential 14th consecutive day, which would be the longest streak since 1996, and has already set seven record closing highs in 2026 compared to only nine in all of 2025
• Top-performing small caps include Corvus Pharmaceuticals (up 230% YTD), Red Cat Holdings (up 121%), and USA Rare Earth (up 98%), though only 10 of 46 stocks breaking out this year have market caps under $5 billion
• Strategists warn the rally may fade after the traditional 'January Effect,' with genuinely sustainable trends typically not emerging until mid-February or early March, and megacap tech earnings on Jan. 28 serving as a key litmus test for the rotation's durability

The Federal Reserve's preferred inflation gauge rose to 2.8% annually in November, up from 2.7% in October, while consumer spending increased 0.5% monthly. The uptick in inflation suggests the Fed is less likely to cut interest rates at its upcoming meeting, as the economy shows continued strength despite a cooling labor market.

• Both overall and core inflation increased to 2.8% year-over-year in November, though monthly gains were modest at 0.2%
• Consumer spending climbed 0.5% in November, indicating robust economic growth heading into year-end
• Economists suggest the Fed has 'little urgency' to cut rates next week given solid economic footing and inflation remaining above the 2% target

Major Northern European pension funds and institutional investors are reassessing their U.S. asset exposure due to mounting geopolitical tensions and concerns about U.S. fiscal health. Swedish and Danish pension funds have already sold or are divesting U.S. Treasuries, while investment advisers report roughly 50% of Nordic and Netherlands clients are considering reducing U.S. holdings. Though the U.S. remains investable, investors say the risk premium for American assets has increased significantly.

• Russell Investments, advising clients with $1.6 trillion in assets, reports about 50% of Northern European clients are considering tilting away from U.S. assets amid policy uncertainty and debt concerns
• Sweden's Alecta and Denmark's AkademikerPension have sold or are divesting U.S. Treasury holdings, citing increased risk associated with U.S. government finances and the dollar, which fell 10% against major currencies last year
• The public nature of this debate is unusual for long-term institutional investors, who typically avoid commenting on current affairs, though funds emphasized decisions are professional assessments not political 'weaponisation of capital'

The Federal Reserve is expected to hold interest rates steady during its January 28 meeting, with the CME Fedwatch tool showing a 95% probability of no change. The final week of January brings a heavy earnings calendar featuring major companies including Tesla, Microsoft, Meta Platforms, Chevron, ExxonMobil, IBM, and UPS. The week will also feature multiple economic data releases, including delayed durable goods orders, consumer confidence, and producer price index figures.

• Fed Chair Jerome Powell will deliver a speech following the FOMC interest rate decision on Wednesday, January 28
• Major economic data releases include previously delayed durable goods orders, trade deficit figures, factory orders, and PPI measurements throughout the week
• A significant number of Dow components and Big Tech companies will report quarterly earnings, creating potential market volatility

Elon Musk's SpaceX is preparing for a potentially record-breaking IPO, lining up four major Wall Street banks for senior underwriting roles. The company, valued at approximately $800 billion in recent private markets, aims to raise tens of billions of dollars in 2026. This would represent one of the largest public offerings in history, surpassing even Saudi Aramco's $29 billion IPO in 2019.

• Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley are being positioned for senior underwriting roles, with Morgan Stanley considered to have an inside track due to its relationship with Musk through Tesla
• SpaceX's valuation doubled from $400 billion in July 2025 to $800 billion by December 2025; a 3-5% equity offering could raise $25-40 billion in proceeds
• Starlink is the primary growth driver with 8.5 million customers generating over $10 billion in annual recurring revenue, having deployed 3,200 satellites in 2025 (a 60% year-over-year increase)

Elon Musk's SpaceX is lining up four major Wall Street investment banks for senior roles in a potential initial public offering, according to a Financial Times report. Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley are being positioned to lead the IPO process.

• Four top-tier investment banks (Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley) are being prepared for senior leadership roles in the potential IPO
• The move signals SpaceX may be moving closer to going public, despite Elon Musk's previous reluctance to take the company public
• The report is based on sources familiar with the matter, though no official timeline or valuation details have been disclosed

Gold, silver, and copper are rallying in early 2026 driven by structural pressures including rising sovereign debt, geopolitical tensions, and expectations for looser Federal Reserve monetary policy, according to David Erfle of Junior Miner Junky. The momentum reflects deeper macro risks rather than a short-term trend, with metals benefiting from their safe-haven appeal amid fiscal imbalances and policy uncertainty.

• Erfle predicts gold could reach $5,000 to $5,500 in Q1 2026 before a healthy 15-20% correction, provided prices hold above the low-$4,000 range on a weekly basis
• The most underappreciated risk for 2026 is the Fed potentially easing monetary policy more than economic conditions warrant, which could reignite inflation and reduce opportunity costs of holding non-yielding assets like gold and silver
• Mining companies are generating strong margins and free cash flow as metal prices rise faster than costs, though broad investor participation remains limited compared to prior cycles, creating potential upside for junior miners

Crypto custodian BitGo priced its IPO at $18 on January 22, 2025, marking the start of what's expected to be a 'supercycle' year for initial public offerings in 2026. The company joins other crypto firms that went public recently, and its debut signals the beginning of a wave of potential mega-IPOs from companies like SpaceX, OpenAI, and Anthropic.

• BitGo's IPO implies a market capitalization of around $2 billion and follows 2024 public debuts from crypto companies Circle and Gemini
• The aggregate value of U.S. unicorns (companies valued at $1 billion+) reached $4.3 trillion by end of December, driven largely by AI company valuations
• NYSE President Lynn Martin expects IPO activity to accelerate in the second half of Q1 into Q2 2026, with major companies being selective about timing their market debuts

The Federal Reserve's preferred inflation measure, the PCE index, showed consumer prices rose 2.8% year-over-year in November, slightly above the 2.7% forecast. Both headline and core PCE increased 0.2% monthly, meeting expectations but remaining above the Fed's 2% target ahead of next week's policy meeting.

• Headline PCE rose 2.8% annually in November, above the 2.7% estimate, while core PCE matched expectations at 2.8% year-over-year
• Monthly PCE and core PCE both increased 0.2%, in line with economist forecasts
• Inflation has remained stubbornly elevated, with headline PCE in the 2.7%-2.8% range from August through November, well above the Fed's 2% long-run target

European stocks with exposure to Ukraine rallied on Thursday after Ukrainian President Zelenskiy announced the first trilateral meeting between Ukrainian, Russian, and U.S. officials to discuss ending the war. Companies expected to benefit from peace gained significantly, while defense stocks fell on reduced conflict prospects. The market movement reflects investor anticipation that a peace deal could unlock economic recovery opportunities in the region.

• Ukraine-exposed stocks surged: Raiffeisen Bank gained 6%, Wizz Air rose 9%, and Ferrexpo soared 19%, while European materials and construction stocks climbed as much as 2.9%
• Defense stocks dropped sharply with the index falling 2.3% (largest daily decline since early December), as Saab fell 4.3% and Rheinmetall declined 3.7%
• The meeting between Zelenskiy and Trump in Davos focused on security guarantees and post-war recovery plans, marking the first formal peace negotiations involving all three parties

The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures price index, rose to 2.8% in November, moving further from the Fed's 2% target. Both headline and core PCE measures came in at 2.8%, matching expectations but up from October's 2.7% rate. The data was released alongside delayed October figures due to a government shutdown.

• Monthly PCE inflation increased 0.2% in both October and November, with both headline and core measures at 2.8% year-over-year in November
• Personal income rose 0.1% in October and 0.3% in November (below the 0.4% forecast), while consumer spending increased 0.5% in both months
• The Commerce Department's Bureau of Economic Analysis released October and November data together after delays caused by the government shutdown

US weekly jobless claims rose by 1,000 to 200,000 for the week ended January 17, coming in below the forecast of 210,000. The data reinforces a stable but subdued labor market characterized by a 'low-hiring, low-firing' environment, as employers remain cautious amid policy uncertainty and AI-driven productivity shifts.

• Continuing claims fell by 26,000 to 1.849 million, though many laid-off workers reportedly struggle to find new jobs despite low headline figures
• Annual benchmark revisions due next month may reveal 911,000 fewer jobs were created through March 2025 than previously reported, suggesting overstated job growth
• Major companies including UPS, GM, Amazon, and Verizon have announced recent job cuts, while uncertainty over Trump's trade and immigration policies dampens hiring activity

NYSE Texas has reached over 100 dual-listed companies in less than a year since its March 2024 launch, marking a significant milestone in Wall Street's expansion into Texas. The growth reflects companies seeking to capitalize on Texas's pro-business legislation while maintaining NYSE protections. NYSE President Lynn Martin announced the achievement at the World Economic Forum, amid President Trump's criticism of the Dallas expansion.

• NYSE Texas went live March 31, 2024, and surpassed 100 dual listings in under a year, allowing companies to access Texas's pro-business regulatory environment while keeping NYSE floor protections
• President Trump criticized the Dallas expansion as 'unbelievably bad' for New York and called it a failure of city leadership, though NYSE maintains it's meant to supplement, not replace, New York operations
• NYSE President Lynn Martin predicts a 'super cycle' for capital markets in 2026, citing strong demand across all sectors and a significant backlog of companies waiting to list

The US economy grew at an annualized rate of 4.4% in the third quarter, according to the Commerce Department's final estimate, exceeding economist expectations of 3.3% and marking the fastest growth pace in two years. Combined with second quarter growth of 3.8%, the economy is showing strong momentum despite a first quarter contraction.

• Third quarter GDP growth of 4.4% significantly beat expectations of 3.3%, representing the strongest quarterly expansion in two years
• The economy grew at a 2.5% annualized rate through the first three quarters of 2025, rebounding from a 0.6% contraction in Q1
• Second quarter GDP was revised to show 3.8% annualized growth, indicating sustained economic momentum in mid-2025

EU lawmakers have scaled back threats of trade countermeasures after President Trump canceled planned tariffs on eight European nations over their stance on Greenland. Despite Trump's apparent retreat, EU officials are demanding clarity on his Greenland intentions and proceeding with an emergency summit in Brussels to assess the situation.

• Bernd Lange, chair of the European Parliament's international trade committee, stated EU countermeasures worth 93 billion euros ($108 billion) on U.S. imports are 'on hold' rather than 'off the table' and may be prolonged for months
• Trump announced a 'framework' or 'concept of a deal' with NATO Secretary General Mark Rutte regarding Greenland, though details remain unclear
• EU leaders emphasized that any Greenland deal should be decided by Denmark and Greenland's people, not between Trump and NATO officials, and will seek direct contact with U.S. counterparts for greater certainty

U.S. stock markets reached all-time highs last week with the S&P 500 approaching 7,000, but investor confidence was rattled by President Trump's threats of tariffs against European allies and concerns over Federal Reserve independence. Markets recovered somewhat after Trump ruled out military action over Greenland during his Davos address. Uncertainty remains as Trump pursues interventionist economic policies and criticizes Fed Chair Jerome Powell ahead of his May departure.

• The S&P 500 fell 3% for the week, breaking below 6,800, as Trump threatened tariffs on eight countries including the UK over Greenland dispute, though markets rallied after he ruled out military force
• Trump's interventionist policies include capping credit card interest rates at 10%, directing $200 billion in mortgage-backed securities purchases, and taking a government stake in Intel
• Kevin Warsh is now the frontrunner to replace Fed Chair Jerome Powell in May, potentially leading to significant changes at the Fed including reduced quantitative easing and increased market volatility

President Trump's retreat from threatened tariffs on eight European countries sparked a global market rally and revived investor talk of the 'TACO trade' ('Trump Always Chickens Out'). Trump walked back the tariffs after claiming a 'concept of a deal' over Greenland at the World Economic Forum in Davos. Wall Street and global equities rebounded after sharp sell-offs earlier in the week.

• Trump had threatened tariffs starting at unspecified levels on eight European countries, set to rise to 25% from June 1, before backing down following market turbulence
• The 'TACO trade' strategy emerged after Trump's April 2025 'liberation day' tariff announcement, when investors learned to anticipate presidential walk-backs after initial market shocks
• While markets rallied, some analysts noted lingering caution with gold holding gains and investors maintaining 'safety elements' in portfolios, suggesting uncertainty about lasting policy changes

Global markets rebounded Thursday after President Trump reversed course on Greenland tariffs, though uncertainty lingers about policy volatility. The S&P 500 rose 1.16% in its biggest gain in two months, while European stocks climbed over 1% and the VIX fear gauge declined from year-to-date highs. Markets now await Fed inflation data and corporate earnings including Intel.

• Trump struck a deal with NATO on Greenland that removes the February 1 tariff threat, though details remain sparse and the agreement will not involve a U.S. takeover of the territory
• Gold remains elevated above $4,800 per ounce despite slipping from Wednesday's all-time high of $4,887.82, reflecting ongoing geopolitical tensions
• The Supreme Court signaled it would not support Trump's attempt to fire Fed Governor Lisa Cook, with justices noting that easy dismissals would 'weaken, if not shatter' Fed independence