General Market News

President Donald Trump issued an executive order targeting U.S. defense contractors for prioritizing shareholder returns over military needs, threatening to ban dividends and stock buybacks. The move puts billions at stake, as major contractors like Lockheed Martin, RTX, and Northrop Grumman have paid out billions in dividends through 2025. Defense stocks initially fell but recovered after Trump proposed increasing the 2027 military budget to $1.5 trillion from $901 billion in 2026.

• Top defense contractors paid substantial dividends through Q3 2025: RTX ($2.7B), Lockheed Martin ($2.3B), Northrop Grumman ($964M), General Dynamics ($1.19B), and L3Harris ($678M)
• Trump's executive order claims traditional defense contractors have been 'incentivized to prioritize investor returns over the Nation's warfighters' after years of misplaced priorities
• The proposed 2027 military budget increase to $1.5 trillion (66% jump from 2026's $901 billion) helped defense stocks recover from initial losses following the dividend and buyback threat

President Trump announced plans to ban institutional investors from purchasing single-family homes, targeting their concentrated presence in Sun Belt markets. While these investors own only about 2% of U.S. single-family rentals nationally, they control roughly a quarter of Atlanta's market and over a fifth of Jacksonville's. Trump argues this corporate ownership has pushed housing out of reach for ordinary Americans.

• Institutional investors control approximately 25% of Atlanta's single-family rental market and more than 20% of Jacksonville's, far exceeding the 2% national average
• Large investors entered these Sun Belt markets aggressively after the 2008 financial crisis, buying foreclosed homes in bulk and expecting stronger price appreciation
• Previous congressional efforts to limit institutional homeownership through regulations, financing limits, or ownership bans have stalled, with most bills remaining in the 'Introduced' phase

Americans grew more worried about the job market in December 2025, with the prospect of finding a job if unemployed hitting the worst level since the survey began in 2013, according to the New York Federal Reserve's Survey of Consumer Expectations. Near-term inflation expectations also rose, with the year-ahead projection increasing to 3.4% from 3.2% in November. Despite job market concerns, households reported feeling more optimistic about their current and expected personal financial situations.

• Job market pessimism was particularly acute among households earning under $100,000 per year, with survey respondents reporting the lowest confidence in finding employment if jobless since tracking began in 2013
• One-year inflation expectations increased to 3.4% in December from 3.2% in November, while longer-term expectations (three- and five-year) remained steady at 3%, which Fed officials monitor more closely for policy decisions
• Expectations of missing a debt payment rose to the highest level since April 2020, and households reported credit is growing harder to access despite feeling more upbeat about their overall financial situations

Used vehicle prices are expected to increase 2% in 2026, returning to historically normal levels after extreme volatility during and after the pandemic, according to Cox Automotive. This stability benefits consumers, though prices remain elevated compared to pre-pandemic levels. The forecast is based on Cox's Manheim Used Vehicle Value Index, which tracks wholesale auction prices.

• The 2% increase represents a return to historical norms, matching the average annual increase since 1998, excluding the pandemic outlier years of 2021 (46.6% increase) and 2022 (14.2% increase)
• Used vehicle prices have stabilized after declining 15% in 2022 and 7% in 2023, with only 0.4% increases in both 2024 and 2025
• Total used vehicle sales are expected to rise to 38.3 million units in 2026, while retail sales are forecast to decline 0.7% to 20.3 million units; falling auto loan rates and increased tax refunds may boost demand

US stocks opened lower on Thursday, with the Dow dropping 100 points and the Nasdaq falling 0.3%, as weakness in major technology stocks weighed on broader indices. Defence stocks surged after President Trump proposed a $1.5 trillion defence budget for 2027, while fresh jobless claims data showed continued labor market resilience with 208,000 new claims.

• Defence stocks rallied sharply on Trump's proposed $1.5 trillion 2027 defence budget, up from $901 billion in 2026, with Northrop Grumman surging over 8% and Lockheed Martin climbing 6%
• Technology stocks dragged down the market, with the Nasdaq underperforming at -0.3% as losses in large-cap tech names offset gains in other sectors
• Initial jobless claims rose slightly to 208,000 for the week ending Jan. 3, below the expected 210,000, indicating underlying strength in the labor market despite economic uncertainty

The Supreme Court is expected to rule Friday on whether President Trump had legal authority to impose tariffs under the International Emergency Economic Powers Act. The case, brought by an educational toy manufacturer and a wine importer, could redefine the scope of presidential trade powers. The decision comes as tariff collections have surged to record levels, reaching $215.2 billion in fiscal year 2025.

• Monthly tariff collections jumped from $23.9 billion in May to $31.6 billion in September 2025, with over $98 billion collected since October 1
• Trump proposed using tariff revenue to fund tax rebates for low- and middle-income Americans by mid-2026, with excess funds directed toward reducing the $38 trillion national debt
• The legal challenge questions whether the IEEPA gave the president authority to impose tariffs or if the action overstepped constitutional limits

US jobless claims rose slightly to 208,000 in the first week of 2026, below expectations of 210,000, indicating the labor market remains resilient despite cooling. While layoffs stay near year-low levels, hiring has weakened sharply, creating a 'low-hire, low-fire' environment driven by tariff uncertainty and AI adoption. The unemployment claims data contrasts with a 58% surge in announced layoffs for 2025, concentrated in tech and federal agencies.

• Continuing claims rose to 1.91 million, reflecting growing difficulty for job seekers to find new work despite low layoffs
• US employers announced 1.206 million layoffs in 2025, the highest in five years, with tech sector restructuring due to rapid AI implementation
• Job openings fell to 0.91 per unemployed person in November, the lowest ratio since March 2021, with hiring plans down 34% to their weakest level since 2010

Goldman Sachs predicts the U.S. stock market rally will continue through 2026, driven by middle-class consumer spending rather than artificial intelligence stocks. The investment bank forecasts a 2.1% GDP increase and expects rising consumer incomes to offset expenses, powering gains in healthcare, essential consumer products, and upscale goods sectors.

• Market leadership will shift from AI stocks to healthcare providers, consumer goods, casinos, and other sectors benefiting from middle-income spending
• The rally is entering its fourth year after a 17% gain in 2025, with Goldman Sachs analysts led by Ben Snider citing consumer income growth as the key driver
• Tech stocks may have become expensive, and while corrections are possible in 2026, Goldman expects the market to finish the year higher

Goldman Sachs predicts the U.S. stock market rally will continue through 2026, driven by middle-class consumer spending rather than AI stocks. The investment bank forecasts a 2.1% GDP increase this year, with rising consumer incomes offsetting expenses and fueling growth in healthcare, essential consumer goods, and other non-tech sectors.

• The market rally is entering its fourth year after rising 17% in 2025, an unprecedented run in recent history
• Goldman Sachs analysts led by Ben Snider identify companies serving middle-income consumers as 'particularly attractive,' shifting focus away from expensive tech stocks
• Any market correction in 2026 is expected to be modest and temporary, with the market projected to finish the year at higher levels

U.S. initial jobless claims rose modestly by 8,000 to 208,000 for the week ended December 27, indicating layoffs remain low despite weak hiring demand. The labor market shows signs of paralysis as employers hesitate to hire due to tariff uncertainty and AI adoption, while announced layoffs in 2025 reached a five-year high of 1.206 million, driven primarily by technology sector cuts.

• Continued unemployment claims increased 56,000 to 1.914 million, suggesting unemployed workers face longer jobless periods as hiring plans dropped 34% to their lowest level since 2010
• U.S.-based employers announced 1.206 million layoffs in 2025 (up 58%), with technology companies and federal government cuts accounting for most reductions due to AI implementation and cost-cutting measures
• Job openings fell to 0.91 per unemployed person in November, the lowest ratio since March 2021, while December nonfarm payrolls are forecast to add only 60,000 jobs with unemployment potentially easing to 4.5%

Treasury Secretary Scott Bessent publicly urged the Federal Reserve to cut interest rates further, calling them 'the only ingredient missing' for stronger economic growth. The Fed cut rates by 0.75 percentage points in late 2025, but markets expect only limited cuts in 2026. Bessent's push comes as he oversees the selection of a new Fed chair to replace Jerome Powell, whose term ends in May.

• The Fed reduced rates to 3.5%-3.75% range through three cuts totaling 0.75 percentage points in the final four months of 2025, but markets now price in just two cuts for 2026
• Bessent is overseeing the selection of Powell's replacement from five candidates, with National Economic Council leader and former Fed Governor Kevin Warsh reportedly among frontrunners
• The Treasury Secretary's call for rate cuts supports the Trump administration's economic agenda while acknowledging the risk that lower rates could reignite inflation

U.S. stock futures declined on Thursday as investors took profits following recent record highs in the S&P 500 and Dow, with traders positioning ahead of Friday's NFP jobs report. Defense stocks bucked the downward trend, surging up to 11% in premarket trading after President Trump proposed a $1.5 trillion military budget for 2027. The S&P 500 is testing key technical support levels after reaching a high of 7006.

• Defense stocks rallied sharply with Kratos Defense up 11.20%, Northrop Grumman gaining 8.84%, and Lockheed Martin advancing 7.98% on Trump's proposed $1.5 trillion 'Dream Military' budget for 2027.
• S&P 500 futures fell 0.25% to 6945.50, with technical analysis showing potential support at the uptrend line around 6907 and the 50-day moving average at 6885.
• Gold miners faced pressure as traders brace for approximately $6.8 billion in futures contract liquidation due to annual commodity index rebalancing between January 9-15, with Newmont Corporation down 2.39%.

The biotech sector is experiencing a strong recovery after a four-year slump, with the industry group ranking second out of 197 tracked groups based on six-month performance. The resurgence is driven by Big Pharma's urgent need to replace $300 billion in sales facing patent expirations through major acquisitions, with $129 billion in biotech deals announced in 2025 through mid-December, up 43% year-over-year in dollar terms.

• Major pharma companies like Merck, Bristol Myers Squibb, GSK, and J&J face 80% of their revenue at risk over the next five years without new drugs, driving aggressive M&A activity including Eli Lilly's Ventyx acquisition and multiple billion-dollar deals by Merck and Novartis
• China has emerged as a formidable competitor, accounting for $61 billion of the $129 billion in biotech deals (up from $1 billion five years ago) and conducting 39% of cancer drug clinical trials compared to 32% in the U.S.
• The Trump administration's direct-to-consumer drug pricing initiative (TrumpRx) has secured deals with Lilly and Novo Nordisk to offer weight-loss drugs at 68-74% discounts ($346-$350/month), potentially expanding market access despite ongoing FDA leadership turnover creating regulatory uncertainty

Planned job cuts in the U.S. fell to 35,553 in December 2024, down 50% from November and marking the lowest level since July 2024, according to Challenger, Gray & Christmas. Despite the December decline, full-year layoffs exceeded 1.2 million, up 58% year-over-year and the highest since 2020. The data suggests potential labor market stabilization after a year of elevated job cuts.

• December layoffs dropped 50% month-over-month to 35,553, an 8% decrease from December 2023, representing a 17-month low
• Full-year 2024 job cuts totaled over 1.2 million, the highest since the pandemic year of 2020 and marking the worst fourth quarter since 2008
• Companies announced plans to hire 10,496 workers in December, up 16% from November and 31% year-over-year, indicating improved hiring intentions

US stock futures declined on Thursday, with Dow futures down 0.35% and S&P 500 and Nasdaq 100 futures down 0.2%, following a choppy Wednesday session that ended multi-day rallies. Investors are cautious ahead of several key events including a Supreme Court ruling on Trump-era tariffs expected Friday and the December jobs report.

• Oil prices continued falling after President Trump announced Venezuela would ship up to 50 million barrels of crude to the US, with Washington signaling long-term control over the country's oil output
• A Supreme Court opinion on the legality of Trump-era tariffs is expected as soon as Friday, marking the first serious legal challenge to the levies
• The December jobs report due Friday is expected to be closely watched as one of the most important economic data points in an otherwise light calendar

Goldman Sachs strategists are shifting focus from AI stocks to consumer-focused equities for 2026, targeting companies tied to middle-income spending as the US equity rally broadens. The firm expects accelerating real income growth and improved household finances to drive demand for discretionary products and services, including upscale retail, household goods, and leisure businesses.

• Goldman's preferred sectors include healthcare, materials, and consumer goods, with strongest conviction in 'nice-to-have' products like upscale apparel, tour operators, and casinos rather than essentials
• The S&P Retail Select Industry Index has risen 3.5% year-to-date and 8.8% since early November, with featured stocks including Dick's Sporting Goods, Burlington Stores, Best Buy, and Gap
• The rotation comes as AI trade enthusiasm cools and economists forecast 2.1% US GDP growth in 2026, with easing tariff pressures, stabilising labor markets, and tax rebates expected to support consumer spending

President Trump announced plans to increase the U.S. defense budget to $1.5 trillion by 2027, a 66% increase from 2026's $901 billion, while simultaneously banning defense contractors from paying dividends or conducting stock buybacks until they deliver superior products on time and on budget. Additionally, the administration revealed plans to sell up to 50 million barrels of Venezuelan crude by selectively rolling back sanctions. These announcements triggered volatility across defense stocks and oil markets early in 2026.

• Defense stocks initially rallied to record highs on the budget news but were whipsawed by a White House executive order immediately banning dividends and buybacks for contractors; RTX shares fell 7% after Trump singled out Raytheon on Truth Social
• Oil prices steadied after two days of declines following Trump's announcement to sell 50 million barrels of sanctioned Venezuelan crude, with revenues earmarked to stabilize Venezuela's economy and repay Exxon Mobil and ConocoPhillips for assets nationalized nearly 20 years ago
• The proposed defense budget increase would require congressional approval, with budget experts expressing skepticism about the feasibility of such a dramatic 66% spending increase in one year

Global defense stocks surged Thursday after President Donald Trump announced plans to increase the U.S. military budget to $1.5 trillion for 2027, up from $1 trillion. The proposed 50% increase aims to build what Trump called a 'Dream Military' to ensure safety and security amid troubled times.

• U.S. defense stocks rose sharply in premarket trading, with major contractors gaining between 5.4% and 6.8%
• European defense stocks also rallied, with the Stoxx Europe Aerospace and Defense index adding 1.4% and individual stocks like Renk and others initially gaining over 4%
• Trump justified the $500 billion budget increase by citing 'troubled and dangerous times' and the need to keep the country safe regardless of foe

European defence stocks surged to record highs after former President Trump announced plans for a $1.5 trillion U.S. military budget following negotiations with senators. The European aerospace and defence index rose approximately 2%, with major defence contractors posting significant gains on the news.

• Trump stated the proposed U.S. military budget for next year should be $1.5 trillion after discussions with senators and political representatives
• Major European defence stocks rallied sharply: BAE Systems up 6%, Leonardo up 5%, Chemring up 4%, and Germany's Rheinmetall and Renk each rose 3%
• The European aerospace and defence index hit an all-time high, rising around 2% by morning trading

Corporate earnings growth is expected to broaden significantly in 2026, with all 16 Zacks sectors projected to show positive growth for the first time since 2018. Total S&P 500 earnings are forecast to increase 12.9% in 2026, though the Tech sector remains the primary driver, contributing 35.9% of index earnings.

• For Q4 2025, S&P 500 earnings expected up 7.9% year-over-year, marking the 10th consecutive quarter of positive growth, with Tech sector leading at +15.4%
• Nine sectors forecast to achieve double-digit earnings growth in 2026, including Aerospace (+38.2%), Autos (+22.6%), and Basic Materials (+20.3%)
• The 'Magnificent 7' companies expected to grow earnings 17.3% in Q4 2025, while the rest of the index would grow only 4.6% without their contribution