General Market News

Germany's CSU party announced support for Chancellor Friedrich Merz's proposal to create a unified European stock exchange, aiming to strengthen capital markets and prevent German companies from listing abroad. The party wants Germany to take a leadership role in establishing the exchange and ensure its headquarters would be located in the EU's largest economy.

• The CSU issued a draft paper backing the European bourse plan ahead of party meetings in Seeon starting Tuesday
• Key supporters include ECB President Christine Lagarde, German finance minister Lars Lindner, and Bundesbank president Joachim Nagel
• Proponents argue fragmented European markets with different exchanges and regulations disadvantage the EU compared to the unified US market

The Federal Reserve enters 2026 facing significant political and policy challenges, including the appointment of a new chair, ongoing economic uncertainties, and unprecedented political scrutiny from the Trump administration. After three consecutive rate cuts in 2025, the Fed is expected to pursue a more cautious approach to monetary policy amid solid growth expectations and persistent inflation pressures.

• Wall Street economists predict 1-2 rate cuts in 2026 as the Fed aims to reach a neutral rate around 3%, with the current rate just 0.5 percentage points above the long-term target
• Political pressures intensify with a Supreme Court hearing on January 21 regarding Trump's authority to remove Fed Governor Cook, while Powell's term as chair expires in May
• Artificial intelligence emerges as a major wildcard for monetary policy, with the Fed needing to assess AI's impact on productivity and employment as the economy accelerates at a projected 3% pace

All three major U.S. stock indexes finished 2025 with gains, marking their third consecutive positive year, driven largely by AI-related growth in tech stocks. The Dow gained 13%, the S&P 500 rose 16.4%, and the Nasdaq jumped 20.4%, despite a sluggish end-of-year correction that saw markets decline for four straight days to start 2026.

• Major AI deals included Softbank's advanced talks to acquire DigitalBridge for $4 billion and Meta's acquisition of Singapore-based AI startup Manus
• Multiple companies announced AI-focused spinoffs, including Applied Digital spinning off its cloud business and Chinese AI giant (unnamed) planning to list its semiconductor unit in Hong Kong
• Tech stocks dominated performance throughout 2025, with AI infrastructure and alternative energy plays like uranium producer Cameco benefiting from increased demand

D.E. Shaw's two flagship hedge funds outperformed the S&P 500 in 2025, with the Oculus fund returning 28.2% and the Composite fund returning 18.5%, compared to the benchmark's 16.4% gain. The strong performance came during a year of record volatility driven by Trump's policy shifts, which created profitable trading opportunities across Wall Street.

• Oculus fund has never had a negative year since its 2004 inception, while Composite has had just one losing year since 2001
• D.E. Shaw manages over $85 billion across multiple strategies, with results aligning with peers like Bridgewater's record profits
• Market volatility from trade wars and geopolitical uncertainty created price arbitrage opportunities that benefited active trading strategies

Charlotte, North Carolina topped CNBC's 2025 Power City Indexes with a 22% median return, narrowly beating Silicon Valley's 21% performance. The city's success was driven by strong gains in lithium, steel, and financial stocks rather than tech, with seven companies posting returns above 20%.

• Charlotte's winning portfolio included Albemarle (lithium) up 64%, Curtiss-Wright (aerospace) up 57%, and Nucor (steel) up 40%
• Silicon Valley came second despite massive gains from AppLovin (112%), Alphabet (66%), and Nvidia (41%), hurt by ServiceNow's 28% decline
• Washington D.C. ranked third with 17% median return, powered by defense contractors RTX (59%) and other Pentagon-adjacent firms

Elliott Investment Management partner Jason Genrich, who led technology sector investments for the activist hedge fund, has departed the firm and will remain as a consultant until mid-year. The 38-year-old senior portfolio manager spearheaded major campaigns at companies including Hewlett Packard Enterprise and Crown Castle during his decade-long tenure at one of the world's most active activist investors.

• Genrich led Elliott's technology, media and telecommunications investments including the HPE campaign in early 2025 and the Citrix private equity buyout with Vista Equity Partners in 2022
• Elliott has been particularly active in 2024-2025 with new campaigns at Lululemon (seeking CEO change) and PepsiCo (reaching settlement for cost cuts in December)
• Genrich currently serves on Crown Castle's board where he led a multi-year activist campaign and will continue as Elliott consultant through mid-2026

Ken Griffin's Citadel flagship Wellington fund gained 10.2% in 2025, outperforming during a volatile year marked by market swings and trade tensions. The hedge fund giant plans to return $5 billion in profits to clients while maintaining its strong long-term track record of 19% annualized returns since 1990.

• Citadel's tactical trading fund led performance with 18.6% returns, while fundamental equity strategy gained 14.5%
• The firm will reduce assets under management from $72 billion to $67 billion by returning profits to limit capital growth
• Wellington fund continues its exceptional performance with 19% annualized returns since inception in 1990

The first trading day of 2026 opened with positive momentum across all major indices, with futures showing gains ranging from 0.29% to 0.93%, as investors consider whether a 'January Effect' will materialize. Market participants are weighing potential headwinds including tariffs, employment concerns, and healthcare costs against the possibility of a fourth consecutive year of double-digit stock market gains.

• Pre-market futures show Nasdaq leading with +235 points (+0.93%), followed by S&P 500 +35 (+0.51%), Russell 2000 +13 (+0.53%), and Dow +139 (+0.29%)
• 2025 recovery from April tariff lows was substantial: Nasdaq +39%, Russell 2000 +33%, S&P 500 +32%, and Dow +24%
• Key economic data ahead includes Jobs Week starting Monday with ADP payrolls, JOLTS data, and unemployment figures following weak November hiring

Former Deputy Treasury Secretary Michael Faulkender argues that Trump administration economic policies enacted in 2025, including the Big Beautiful Bill Act tax cuts and energy deregulation that pushed oil prices down 28% to $57 per barrel, have set the foundation for stronger economic growth in 2026. Despite inflation hovering at 2.7% in November, Faulkender expects lower energy costs and tax refunds to boost the economy as these policies fully take effect.

• Oil prices dropped from a 2025 high of $78.70 to $57 per barrel following Trump's energy deregulation, though Faulkender says these benefits haven't 'fully internalized' into the economy yet
• The Big Beautiful Bill Act extended Trump-era tax policies and created new forms of tax relief, with large refunds expected in February and March 2026
• Inflation remained stubbornly above the Fed's 2% target throughout 2025, ranging from 2.3% (April low) to 3% (September peak), ending at 2.7% in November

The author argues that 2026 will likely see four interest rate cuts from the Federal Reserve, rather than the two currently priced in by markets, driven by rising unemployment (from 4% to 4.6% in 2025) and the anticipated appointment of a new Fed chair in May 2026 who will align with President Trump's preference for lower rates.

• Unemployment rose from 4% in January 2025 to 4.6% by year end, triggering the Sahm rule multiple times and signaling potential recessionary pressures
• Jerome Powell is expected to step down in May 2026, with Kevin Hassett potentially becoming the new Fed chair under Trump's selection
• Questions about Fed independence are likely to emerge as Trump has clearly signaled his desire for lower interest rates and will hand-pick a compliant Fed chair

US stock futures point to a positive start for 2026, with tech stocks leading the charge as Nasdaq futures rise 0.9% on the first trading day of the year. Market analyst Kenny Polcari identifies key themes for the year ahead including midterm elections, potential tech IPOs worth trillions, AI companies needing to prove monetization, and a new Fed chair appointment in May.

• Gold hits new high above $4,550 on Boxing Day before retreating to $4,374, while bitcoin trades at $89,340 and crude oil at $56.90
• Major tech IPOs including SpaceX, OpenAI, Anthropic and Kraken could raise trillions in 2026 as AI shifts from 'promise' to 'payoff' phase
• S&P 500 trading at 22x forward earnings above historical averages signals expensive valuations requiring stronger fundamentals

The 2026 stock market started Friday with tech stocks leading gains, continuing the AI-driven rally that defined 2025. The Magnificent Seven stocks all advanced, with semiconductor companies like Broadcom up over 1.5%, suggesting investors remain committed to technology despite concerns about high valuations and demands for profitable AI applications.

• Wall Street expects the S&P 500 to climb roughly 11% in 2026, below the advances of the previous three years
• Tech struggled in late 2025 with the Nasdaq posting two consecutive monthly losses as investors rotated toward economically sensitive sectors
• Investment managers like Nancy Tengler advise staying focused on tech 'winners' and buying dips, with Palantir (up 135% in 2025) and Oracle continuing gains

Stock futures are rising as 2026 trading begins, with Dow futures up 0.4% and Nasdaq futures up 1%, following strong double-digit gains in 2025 but a four-day losing streak to close the year. Key market movers include Tesla ahead of Q4 delivery numbers, furniture stocks gaining on delayed tariff increases, and precious metals resuming their climb after recent record highs.

• Tesla expected to report 422,850 Q4 deliveries, down from Q3, with full-year 2025 deliveries forecast at 1.64 million versus 1.8 million in prior years
• Furniture retailers RH, Wayfair, and Williams-Sonoma rose 1-2% after White House delayed 25% tariff increases amid trade negotiations
• Gold futures up 1.4% to $4,400/oz and silver up 4% to $73.45/oz, recovering from last week's decline caused by CME Group margin requirement increases

Wall Street returns from the holiday break to face a data-heavy first week of 2026, with multiple employment reports, economic indicators, and earnings releases scheduled. The week culminates Friday with December's crucial U.S. employment report, unemployment rate, and wage data, alongside consumer sentiment figures.

• Key economic releases include ISM manufacturing and services indices, ADP employment data, weekly jobless claims, and Friday's comprehensive jobs report with unemployment and wage statistics
• Corporate earnings season begins with reports from Acuity (AYI), Cal-Maine Foods (CALM) and others, while Richmond Fed President Tom Barkin is scheduled to deliver two speeches during the week
• Friday January 9th will be the busiest day, featuring December employment data, housing starts, University of Michigan consumer sentiment survey, and multiple economic indicators

Warren Buffett officially stepped down as CEO of Berkshire Hathaway after six decades, handing leadership to Greg Abel. Meanwhile, U.S. stock markets kicked off 2026 with a four-day losing streak despite recording double-digit gains for three consecutive years in 2025, leaving investors wondering if the new year will reverse the recent downturn.

• Major indexes (Dow, S&P 500, Nasdaq) all down more than 1% to start 2026, though strategists remain optimistic about the year ahead
• Tech companies' massive AI data center buildouts face bipartisan political pushback over electricity usage and environmental concerns ahead of 2026 midterms
• Airlines diverge between premium expansion (Delta's business class, JetBlue lounges) and budget carrier struggles, with Spirit Airlines in its second bankruptcy

The US economy entered 2026 with strong GDP growth of 2.8% and rising stock markets, but underlying weaknesses persist as unemployment rose to 4.6%, wage growth slowed, and households continue struggling with elevated prices despite inflation cooling to 2.7%. Policy stimulus in 2026 through tax cuts and Fed rate cuts may boost short-term growth, but the economy remains narrowly supported by asset prices and technology investment rather than broad-based expansion.

• Labor market deterioration accelerated with unemployment rising 0.5 points to 4.6%, minimal job growth outside healthcare, and over 10% of workers experiencing pay cuts
• Despite inflation falling to 2.7%, 70% of Americans report struggling to afford basics as food, housing, and utilities remain far above pre-pandemic levels
• Wall Street expects S&P 500 gains to moderate to single digits in 2026 after three years of double-digit returns, potentially limiting wealth effects that have supported consumption

Fed Chair Jerome Powell refuses to say whether he'll remain on the Federal Reserve Board when his chairmanship ends in May 2026, despite having two years left as governor. This decision carries major implications for the Fed's independence as President Trump could gain majority control of the Board if Powell departs, potentially enabling Trump's push for ultra-low interest rates.

• Three Trump appointees currently sit on the seven-member Board of Governors; Powell's departure would immediately give Trump a majority
• The 1934 Banking Act appears to give a board majority the power to fire individual bank presidents who oppose rate cuts
• Powell faces a personal vs. professional dilemma: ready for civilian life after 13 years but concerned about protecting Fed independence from unprecedented presidential pressure

The Trump administration has scaled back proposed tariffs on Italian pasta makers from up to 92% to 2.26%-13.98% following a Department of Commerce investigation. This decision affects Italy's $800 million pasta export market to the U.S. after officials found Italian producers had addressed concerns about unfairly low pricing.

• La Molisana's tariff was reduced to 2.26% and Garofalo's to 13.98%, while 11 other producers face a 9.09% duty, down from the originally proposed rates of up to 92%
• Italian pasta makers had warned the initial tariffs would effectively shut them out of the U.S. market, worth nearly $800 million in exports annually
• Final rates will be announced March 12 (with possible 60-day extension), as Italy's foreign ministry praised U.S. recognition of companies' 'constructive willingness to cooperate'

MarketBeat identifies financials, industrials, and utilities as three sectors trading below fair value entering 2026, as investors rotate away from overvalued tech and AI stocks. The article highlights specific undervalued stocks within each sector that could outperform their respective ETFs as rate cuts, infrastructure spending, and data center energy demand drive growth.

• Financial stocks like Capital One, PNC, and Bank of America trade below the sector's 16.5x forward P/E ratio, with expected rate cuts in early 2026 potentially boosting bank earnings
• Industrial names including Boeing, Union Pacific, and Honeywell offer value below the sector's 24x P/E average as infrastructure demand and capital expenditure revival accelerate
• Utilities sector stocks such as Exelon, PG&E, and Algonquin trade at discounts to the 18x sector P/E, positioned to benefit from surging data center power needs

The US dollar posted its worst annual performance since 2017, falling about 8% against a basket of foreign currencies due to President Trump's 'Liberation Day' tariffs in April, Federal Reserve turmoil, and economic uncertainty. The dollar's historic first-half slide erased a decade's worth of gains from its long bull run, while stubborn inflation and foreign investor pullbacks compounded the currency's weakness.

• April tariff blitz proved the turning point, with Trump imposing 10% baseline duties that sent the S&P 500 down 13% in a week and triggered the dollar's steepest six-month decline in over half a century
• China reduced Treasury holdings to 2008 lows while global asset managers increased hedges against dollar weakness, with core inflation hovering near 3% limiting Fed flexibility
• Markets anticipate additional Fed rate cuts in 2026 as Kevin Hassett emerges as frontrunner to replace Jerome Powell in May, further undermining the dollar's yield advantage