General Market News

Wall Street's major indexes surged on Monday, with the Dow Jones hitting an all-time high above 49,000 for the first time, driven by financial and energy stocks following a US military strike that resulted in the capture of Venezuelan leader Maduro. Investors anticipate the move could grant American firms access to Venezuela's vast oil reserves, boosting energy and defense sectors.

• The Dow jumped 713 points (1.5%) to 49,095, the S&P 500 gained 0.8%, and the Nasdaq climbed over 200 points (1%) as financial stocks soared, with Goldman Sachs up 4.75% and JPMorgan rising 3%
• Energy stocks gained 1.3% and defense contractors advanced sharply (Lockheed Martin up 2.5%, General Dynamics up 2.8%) on expectations of access to Venezuela's oil reserves and military action
• The rally follows a week of losses and comes ahead of Friday's key nonfarm payrolls report, with markets pricing in about 60 basis points of Fed rate cuts in 2026

Ray Dalio, founder of Bridgewater Associates, warned that the AI-driven boom in technology stocks is entering early bubble territory. U.S. stocks significantly underperformed non-U.S. equities and gold in 2025, despite Wall Street posting its third consecutive year of gains. Dalio expressed concern about Fed policy potentially inflating bubbles further through lower interest rates.

• Wall Street posted three straight years of gains through 2025, last seen in 2019-2021, driven by heavy investor demand for AI-linked stocks that pushed benchmarks to record highs
• U.S. stocks underperformed international equities in 2025, with gold rising over 60% and emerging markets posting banner years while Britain outpaced major global markets
• Dalio suggests the Fed and FOMC will likely push nominal and real interest rates down, which could support prices but also inflate bubbles, while analysts see investors seeking opportunities beyond highly valued tech stocks

US stocks opened higher on Monday, with the Nasdaq climbing 0.8% and the S&P 500 and Dow each rising 0.6%, as markets shrugged off geopolitical tensions following Washington's strike on Venezuela and the capture of President Nicolás Maduro. Energy stocks surged on expectations that US oil companies may access Venezuelan oil infrastructure, though analysts remain skeptical about the timeline for production recovery.

• Exxon Mobil jumped 4.3% and Chevron surged 7.8% in pre-market trading after President Trump indicated 'very large' US oil companies would be invited to rebuild Venezuela's oil infrastructure, though experts warn this could take years
• Tech and semiconductor stocks rebounded as the Nasdaq looked to snap a five-day losing streak, with Taiwan Semiconductor gaining 2.63% after Goldman Sachs raised its price target
• Key events for Monday include the ISM Manufacturing PMI report (expected at 48.3, still signaling contraction) and Nvidia CEO Jensen Huang's CES keynote, both expected to set the tone for January trading more than geopolitical headlines

Minneapolis Federal Reserve President Neel Kashkari stated that artificial intelligence is causing major companies to slow their hiring, though many are experiencing real productivity gains from the technology. He expects the labor market to see continued low hiring and low firing, particularly among larger corporations, while smaller companies remain less affected by this trend.

• AI's impact on hiring is primarily a 'big company story' rather than affecting smaller businesses, according to Kashkari
• Companies that were skeptical two years ago are now actively using AI and reporting actual productivity gains from their investments
• Kashkari anticipates a continued pattern of low hiring and low firing in the labor market as businesses integrate AI technology

Minneapolis Federal Reserve President Neel Kashkari stated Monday that the Fed is approaching the neutral interest rate level and may not need to cut rates much further. With the federal funds rate currently at 3.5%-3.75%, Kashkari indicated policymakers must now balance persistent inflation concerns against potential labor market weakness before deciding on additional cuts.

• Kashkari believes the Fed is 'pretty close to neutral right now,' with current rates only about half a percentage point from the committee's estimated neutral rate that neither supports nor restrains growth
• The unemployment rate has risen to 4.6% while core inflation remains at 2.8%, above the Fed's target, creating uncertainty about whether inflation persistence or labor market softening poses the bigger risk
• As a voting FOMC member in 2026, Kashkari has expressed concerns about recent rate cuts and potential inflationary effects from President Trump's tariffs, suggesting the Fed's cutting cycle may be nearing completion

President Trump has proposed $2,000 tariff-funded stimulus checks for middle and lower-income Americans, potentially targeting households earning under $100,000. The U.S. collected nearly $200 billion in tariff revenue last year to potentially fund these payments, though no legislation has been passed yet. The White House indicates a proposal may emerge in 2026, possibly before midterm elections.

• Eligibility appears focused on families making less than $100,000 annually, with high-income earners explicitly excluded from the proposed payments
• The U.S. collected approximately $195-200 billion in tariff revenue in the past year, which would fund the dividend program and help reduce national debt
• No formal legislation exists as of early 2026; White House adviser Kevin Hassett suggests Congress may receive a proposal later this year, with potential IRS distribution similar to past stimulus checks

Todd Horwitz, Chief Market Strategist at Bubba Trading, predicts a 'massive stock market collapse' with equities potentially falling 40-60% over the coming period, with heightened risks expected in 2026. He cites excessive federal spending, problematic rate cuts that primarily benefit banks, AI-driven job losses, and inflated tech company valuations as key warning signs. Despite his bearish equity outlook, Horwitz recommends hedging with precious metals, forecasting gold could reach $6,000 and silver above $80 in the next twelve months.

• Horwitz warns equity markets could decline 40-60%, noting that only once in history has the market sustained double-digit gains for four consecutive years, making 2026 unlikely to continue the streak.
• Rate cuts are identified as a 'drastic mistake' that primarily benefit banks and government debt rather than average households, while AI-driven job displacement could force workers into a difficult employment market and potentially lead to universal basic income.
• Gold is forecast to reach $6,000 and silver above $80 in 2026, driven by persistent inflation (which Horwitz believes is understated), poor monetary policy, and a 'K-shaped economy' benefiting only the top 10%.

Oil stocks surged Monday after President Trump announced U.S. oil companies will be 'very much involved' in reviving Venezuela's oil industry following a military operation that captured and extradited President Nicolás Maduro. Venezuela holds some of the world's largest oil reserves but currently produces only 900,000 barrels per day, down from a peak of 3.5 million in the late 1990s.

• Refiner Valero Energy and oilfield services firms Halliburton and Schlumberger led early gains, all trading up more than 7%, while Chevron topped the Dow Jones with a 6% gain as the only U.S. oil company currently operating in Venezuela.
• Analysts estimate Maduro's removal could return around 200,000 barrels per day to global markets in the near-term, benefiting Gulf Coast refiners that process Venezuelan heavy crude, though significant production recovery will require years of infrastructure investment.
• Morgan Stanley notes Chevron is 'arguably best positioned to scale up production' given its existing operations, while Exxon Mobil and ConocoPhillips had assets expropriated in 2007, creating potential challenges for broader U.S. oil company involvement.

U.S. stock futures pointed higher Monday to start the first full trading week of 2026, with the S&P 500 and Nasdaq futures up 0.3% and 0.7% respectively. Markets responded to the Trump administration's capture of Venezuelan President Nicolás Maduro, boosting oil stocks while driving investors toward safe-haven assets like gold and silver. Tech stocks gained ahead of Nvidia CEO Jensen Huang's appearance at the CES trade show.

• Oil and gas stocks surged 3-9% premarket after Trump called for American companies to invest in rebuilding Venezuelan oil production, with Chevron, ExxonMobil, ConocoPhillips, and major oilfield service providers leading gains.
• Gold futures jumped over 2% to $4,420 per ounce and silver futures rose 4.5% to $74.20 per ounce as investors sought safe-haven assets amid uncertainty over Venezuela developments, approaching record highs set in late December.
• AI-related chip stocks including Nvidia, Intel, Micron, Broadcom, and AMD climbed premarket as investors await Nvidia CEO Jensen Huang's 4 p.m. ET press conference at CES, while scrutiny continues over returns on massive data center investments.

The Federal Reserve faces significant uncertainty in 2026 as Jerome Powell's tenure ends and a new chair takes over, raising concerns about political independence. With persistent inflation, bifurcated economic growth, and the Fed's dual mandate becoming harder to balance, investors should consider active bond ETFs for greater adaptability in navigating these challenges.

• Powell's replacement as Fed chair in 2026 marks the end of his tenure since 2018, sparking questions about the central bank's future independence from political pressure
• The Fed faces complications managing its dual mandate of high employment and low inflation amid stubborn inflation data and uneven economic growth
• Active bond management offers structural advantages over passive strategies, including faster replacement of called or defaulted bonds and closer assessment of individual issuers during periods of Fed uncertainty

After just one trading day in 2026, investors have heavily favored AI-related technology stocks, with four of the top five S&P 500 performers coming from the information technology sector. Memory and storage companies serving AI model development dominate the early leaders, with gains ranging from 7% to 16%. These stocks show strong fundamentals, with some companies expecting earnings growth exceeding 300% in 2026.

• Sandisk leads all S&P 500 stocks with a 16.0% gain and a perfect 99 RS Rating, with analysts projecting 325% earnings growth in 2026 and 69% in 2027
• AI memory and storage suppliers Micron Technology (+10.4%) and Western Digital (+8.8%) are capitalizing on massive demand from AI model makers requiring large computing capacity
• Four of the top five performing stocks are in information technology, with only Comfort Systems USA (Industrials, +7.5%) breaking the tech dominance among early 2026 winners

Wall Street is poised to open the first full week of 2026 with gains, driven by renewed enthusiasm for artificial intelligence stocks following strong results from Nvidia suppliers and a bullish note on Taiwan Semiconductor Manufacturing Company. S&P 500 and Nasdaq 100 futures climbed 0.4% and 0.75% respectively, while markets largely shrugged off geopolitical concerns related to Venezuela.

• Nasdaq 100 futures rose 0.75% and S&P 500 futures gained 0.4%, with AI optimism sparked by positive news from Nvidia suppliers and TSMC
• Markets largely ignored geopolitical tensions after President Maduro's capture in Venezuela, as the country represents less than 1% of global oil output
• Investors are looking ahead to Friday's US jobs data, which will provide the first clear economic signal of 2026

JPMorgan expects equities to deliver positive returns in the first half of 2026, driven by easing inflation, steady growth, and broadening earnings. The bank is most bullish on European equities, citing attractive valuations at record discounts to the US and an expected earnings rebound following German fiscal stimulus and ECB rate cuts. JPMorgan also favors emerging markets but remains cautious on US valuations, where the S&P 500 trades at approximately 23 times forward earnings.

• Europe is JPMorgan's clearest conviction, with an overweight rating on Eurozone equities trading at record discounts to the US; the bank expects a 2026 earnings rebound after three consecutive years of declines
• The S&P 500 is considered expensive at 23 times forward earnings, though December's consolidation has improved risk-reward; broader market leadership will likely require more aggressive Fed dovishness
• JPMorgan upgraded emerging markets to overweight, citing supportive rate cuts, reduced dollar pressure, and increased China policy support, while favoring China technology and Korea within the asset class

Global investors are expected to shift toward value-oriented strategies in 2026 as concerns over an AI bubble grow and highly valued technology stocks face scrutiny. After a volatile 2025 marked by tariff-driven swings and subsequent record highs in U.S. markets, analysts predict opportunities in undervalued assets including small-cap stocks, gold, healthcare, financials, and emerging markets. The environment favors active investing as traders become more selective amid expectations of Federal Reserve rate cuts and evolving policy landscapes.

• Small-cap stocks may rebound as the Russell 2000 is forecast to gain nearly 14% in 2026, driven by improving earnings and falling borrowing costs from expected Fed rate cuts.
• Gold prices could reach $5,000 per ounce according to J.P. Morgan and Bank of America, extending its historic 2025 run with continued central bank buying supporting demand.
• Emerging markets are positioned to attract strong inflows due to a weakening U.S. dollar and improved macro stability, though domestic elections in Brazil and Colombia pose political risks.

Following the U.S. military strike and capture of Nicolas Maduro in Venezuela, investors are monitoring market signals to determine whether this represents a systemic risk or a temporary headline shock. So far, market reactions have been muted, with gold rising 2% and the VIX remaining at 14.5, well below stress levels, suggesting 'modest hedging rather than flight-to-safety' according to analysts.

• Oil markets show no supply concern: Brent crude remains around $60 in contango structure rather than backwardation, indicating ample supply despite Venezuela producing 1 million barrels per day (1% of global supply)
• Traditional risk indicators remain calm: U.S. Treasury yields unchanged at 4.187% (10-year) and 3.475% (2-year), credit spreads stable, and the VIX at 14.5 compared to 50+ during last year's tariff shocks
• Gold is the primary beneficiary, advancing to $4,419 per ounce with analysts expecting $4,800 this year, while longer-term risk centers on whether the Venezuela intervention changes behavior around other flashpoints like Taiwan

European defence stocks surged to a two-month high on January 5, with the sector index rising 3.2% following U.S. military action in Venezuela over the weekend. Major defence companies across Germany, Italy, Sweden, France, and Spain saw gains of 4-7% as analysts cited shifting U.S. foreign policy focus and potential European troop deployments to Greenland as catalysts supporting the sector.

• Germany's Hensoldt, Rheinmetall, and Renk led gains with 6-7% increases, while Italy's Leonardo, Sweden's SAAB, and Spain's Indra also rose around 6%
• Analysts at Jefferies noted the Venezuela strike may redirect Washington's focus toward Greenland and Ukraine ceasefire negotiations, removing a key policy overhang on the defence sector
• France expressed support for Denmark and Greenland's sovereignty amid renewed U.S. threats, with potential European troop deployments reinforcing the need to raise defence budgets quickly

Global defense stocks surged on Monday following a U.S. military operation that removed Venezuelan leader Nicolas Maduro from power. Investors view the action as signaling a shift toward 'hard power' geopolitics that will drive increased military spending and rearmament, particularly in Europe and Asia.

• European defense stocks rose sharply with Rheinmetall up over 7%, Hensoldt up nearly 7%, and Leonardo gaining 5.8%, while Asian defense stocks like Mitsubishi Heavy Industries jumped almost 10%
• Fulcrum Asset Management's CIO describes the Venezuela operation as a 'signaling exercise' invoking the Monroe Doctrine, representing a fundamental shift from previous U.S. foreign policy approaches
• The gains reverse recent sector weakness amid Ukraine-Russia peace prospects, with analysts expecting sustained increases in defense spending and military rearmament globally in response to the new geopolitical environment

Payroll data is evolving from an administrative function into critical financial infrastructure, as real-time wage access and payroll information become significant economic signals. The U.S. Labor Economy, comprising 60 million workers, represents 36% of employment and drives 15% of consumer spending, making wage timing increasingly important for financial stability and economic growth.

• Modern wage infrastructure enables real-time access to earned income, helping workers synchronize earnings with expenses and improving household cash flow efficiency
• Payroll data provides immediate indicators of income continuity and earning capacity, offering more accurate risk assessment than traditional backward-looking metrics like credit scores
• Companies investing in flexible pay systems see reduced turnover costs, improved employee engagement, and competitive advantages in tight labor markets

Global markets face a turbulent start to 2026 following the U.S. military attack on Venezuela that captured President Nicolas Maduro, creating geopolitical uncertainty after a strong 2025 where the S&P 500 gained 16.39%. U.S. stocks wobbled on Friday with the S&P 500 rising just 0.19%, while Asian markets jumped over 3% Monday on defense stock gains. The situation raises questions about oil supply, foreign policy implications, and market stability in the year ahead.

• The U.S. conducted a military operation Saturday capturing Venezuelan President Nicolas Maduro, with Secretary of State Marco Rubio appearing to backtrack on Trump's claim the U.S. will 'run' Venezuela
• Trump ordered Chinese-controlled chip firm HieFo to divest from its acquisition of U.S. chip assets, escalating U.S.-China tech tensions
• SpaceX is reportedly eyeing a $1.5 trillion valuation for its upcoming IPO, which would surpass Saudi Aramco's record, with Musk confirming reports of going public this year are 'accurate'

European stocks are expected to open higher on Monday as global markets react to the U.S. military operation that captured Venezuelan President Nicolas Maduro and his wife over the weekend. Maduro was flown to New York to face drug-trafficking charges following strikes on Venezuela, with markets weighing potential impacts on oil supplies from the OPEC member nation.

• U.K. and French indices expected to open 0.6% higher, with Germany up 0.5% and Italy up 0.7%
• Oil prices edged higher as investors assessed potential supply impacts, though Venezuela produces less than 1 million barrels per day
• Secretary of State Marco Rubio appeared to walk back President Trump's comments about U.S. control, noting Washington would use leverage to meet policy goals