Financial News

In-depth reporting and analysis on markets, the economy, and everything affecting your money.

January 18, 20264 min read

Morning Brief: SMCI +11% on $250B Deal; S&P Stalls at Valuation Wall

A massive $250B US-Taiwan trade pledge reignited the AI infrastructure trade, sending Super Micro Computer (SMCI) surging 11% to $32.66 while the broader S&P 500 stalled at 6,940. Despite strong earnings beats from JPMorgan ($46.8B revenue) and Bank of America (+18% EPS), financial stocks saw muted action, confirming that the "higher for longer" net interest income benefit is fully priced in. The divergence is stark: capital is aggressively rotating from value sectors back into hardware capex plays, even as the S&P 500 trades at a precarious 22.2x forward P/E—significantly above the 20.0x historical average. Elsewhere, ImmunityBio (IBRX) rocketed 40% on revenue data, signaling speculative appetite for organic growth outside the tech complex. Watch the 10-year yield as Fed Chair speculation shifts toward Kevin Warsh; a "hawkish institutionalist" appointment could challenge the valuation premium currently supporting the index.

Monthly Wrap: Bond Vigilantes Return—10Y Hits 4.23% as Trump Trade Stalls

Markets

January 18, 20263 min read

Monthly Wrap: Bond Vigilantes Return—10Y Hits 4.23% as Trump Trade Stalls

The "Trump Trade" hit a wall in January as bond vigilantes drove the 10-year Treasury yield to a 4-month high of 4.23%, overshadowing a strong start to earnings season. Despite JPMorgan ([[JPM]]) and Morgan Stanley ([[MS]]) beating estimates and inflation data softening, the S&P 500 stalled at 6,940 as markets priced in rising fiscal and personnel risk. The divergence is extreme: The Semiconductor Index (SOX) gained 1.15% on a historic $250B US-Taiwan trade deal, while Constellation Energy ([[CEG]]) plunged 10% on grid overhaul fears—confirming that policy proximity, not just macro, is driving alpha. The variant view: rising yields despite cool inflation signals a supply problem, not a price problem. Watch the Fed Chair nomination closely; continued ambiguity regarding Kevin Hassett could push the 10-year through 4.30%, a level that likely breaks the equity valuation floor regardless of Q4's +8% earnings growth.

Weekly Wrap: Small Caps Surge to Records as Yields Stall the S&P

Markets

January 18, 20263 min read

Weekly Wrap: Small Caps Surge to Records as Yields Stall the S&P

The 'everything rally' fractured into a violent rotation this week as the 10-Year Treasury yield climbed to 4.23%, stalling the S&P 500 (-0.38%) but igniting a 2.0% surge in the Russell 2000 to fresh records. The catalyst was twofold: a 'Warsh Premium' pricing into bonds on rumors of a hawkish Fed Chair pick, and a domestic growth trade that favored small caps and semiconductors (Micron +7.8%) over broad tech. While JPMorgan anchored financials with a 7.6% earnings beat, the macro data flashed a hidden warning: Core Retail Sales rose 3.58% YoY, yet unit demand fell 1%—a classic stagflationary signal where revenue growth is purely inflationary. The variant view: the market is mispricing the risk of a trade war, with new tariff threats on Europe (Greenland dispute) largely ignored by consensus. Watch the 4.30% yield level next week; an official Warsh nomination could trigger a repricing that challenges the 6,900 support on the S&P 500, testing the durability of the soft landing narrative.

Week Ahead: 'Sell-the-News' Hits Banks—Can Netflix Clear the Bar?

Markets

January 18, 20264 min read

Week Ahead: 'Sell-the-News' Hits Banks—Can Netflix Clear the Bar?

The 'sell-the-news' regime has officially arrived, stalling the S&P 500 at 6,940 as strong bank earnings failed to sustain the rally. Despite JPMorgan delivering $46.77B in revenue (+6.9% YoY) and Bank of America beating EPS estimates, the sector retreated (BAC -3.8%), signaling that "good" is no longer good enough for a market priced for perfection. Concurrently, the 10-year Treasury yield crept back to 4.23%, pressuring valuations just as the index tests the psychological 7,000 barrier. While financials fade, semiconductors are decoupling—Micron surged 7.8% on a $250B US-Taiwan trade investment—suggesting capital is rotating into structural policy plays rather than exiting equities entirely. The burden of proof now shifts to Netflix (Tuesday PM), where consensus revenue of $11.97B (+16.8%) must be accompanied by flawless guidance to prevent a broader tech correction; meanwhile, watch for volatility from any Fed Chair nomination rumors (Warsh vs. Hassett) emerging from Davos.