Market Update

DOW 49,000 (-4), S&P 500 6,972 (-6), Russell 2000 2,658 (-9), NYSE FANG+ 15,607 (-99), ICE Brent Crude $67.91/barrel (+$0.34), Gold $5,294/oz (+$212), Bitcoin ~89.6k (+661)

• Today’s main events: Fed meeting (meh, probably), tech earnings
• S&P around unchanged, Sectors mixed
• Energy leading, Tech slightly higher, Healthcare lagging
• Dollar higher, metals continue climbing 
• Check out some of the recent ICE Data/Content:
• Inside The ICE House
  • History Series: Trailblazing Women Who Transformed Finance and Created a New Wall Street
  • ETF Central: Goldman Sachs Asset Management Chief Transformation Officer Bryon Lake
  • ICE First Look at Mortgage Performance: December - Increased Refinance Activity Drives Mortgage Prepayments Back Toward 3.5-Year High
  • Market Story Lines

MAC Desk Commentary:
Yesterday was a mixed session with tech staying in a leadership role for the third consecutive day. The S&P 500 ticked to a new all-time, just under the next closely watched round number, 7000. The Dow Jones Industrial Average fell nearly 1%, getting a bit further away from its milestone, after United Health fell nearly 20% after CMS held Medicare Advantage rates around unchanged for 2027. The other highlight of the day was the continued weakness in the USD index, which briefly broke last year’s low (~96) late in the session as President Trump suggested he was OK with the recent weakness. 

Speaking of Trump, it was an exciting morning on the floor of the NYSE today as First Lady Melania Trump rang the opening bell, not to celebrate the weakening Dollar, but the theatrical release of her new film. That was a prelude to the two main market events today- the Fed rate decision and the start of mega cap earnings. While the Fed meeting isn’t expected to reveal any big surprises, tonight’s earnings (IBM/LRCX/META/MSFT/NOW/TSLA) could determine whether the recent outperformance of Tech and larger caps continues.  

Before that though, the S&P opened up 0.3% today, just above the 7000 level. However the index has since faded and is trying to stay flat. Discretionary (Amazon reversing early gains, Carvana down 10%), Comm Services and Staples came in from initial levels. The equal-weight is also flat, S&P 600 down 0.2% and Russell down 0.5%.  

 

Energy is leading, with Nat gas names at the front. Tech is up as well, with semis strong. Intel is bouncing 10% after a recent sharp selloff. Texas Instruments is up similarly and lifting other analog chip makers after above-the-Street guidance and improving conditions in its Industrial market. Storage names are also strong today on the back of Seagate’s (+20%) earnings.

Consumer-related names are mixed with Starbucks higher while Brinker has seen a wide range (+7% to -3%) and is currently up 1%. Healthcare is the lagging sector, with tools and pharma weak across the board. Services are also lower but United is bouncing a bit from yesterday’s drop.


 
After getting as low as 95.36 yesterday, the USD Index managed to regain 96 at the close. It opened below 96 again today but is rallying a bit. The Dollar is up almost 1% against the yen and euro. Treasury yields are up 1bp across the curve ahead of the Fed meeting. As noted above there isn’t much anticipation ahead of today’s FOMC policy decision.  Rates are expected to remain on hold. Chair Powell will likely get pressed on the spicier topics in the legal realm rather than the monetary, but he probably won’t give much of a sound bite. Treasury Secretary Bessent commented today that the US always has a strong dollar policy and is absolutely not intervening in the dollar-yen. Bringing down trade deficits would lead to more dollar strength over time, he added.
 

• US 2yr +1bps to 3.59%, 5yr +1bps to 3.85%, 10yr +1bps to 4.26%, 30yr +1bps to 4.87%
• USD index: +$0.32 to $96.38

Global markets were mixed overnight with Asia rallying largely due to tech strength. The Nikkei closed around unchanged with officials continuing to verbally intervene in the yen. Softbank is in talks to add to its investment in OpenAI. The Hang Seng closed up 2.6% with broad based strength. South Korea added to its gains with memory stocks leading after Seagate’s update.  According to Bloomberg, South Korea overtook Germany in stock market value after the former’s tech-powered increase over the past year. European indices were mixed at the open but moved lower throughout the session. France was a laggard, falling almost 1% after LVMH earnings disappointed and pressured the rest of the luxury space.


 
Commodities are mostly higher. ICE Brent is off its highs, up ~0.5% as President Trump warns of a “massive Armada” heading towards Iran, with time running out for a nuclear deal to be reached. Natural gas futures contracts roll today, with the expiring February contracts down 3%, March up modestly. Metals continue moving higher with silver and palladium up ~8% while gold gains 4%, breaking above 5,200. Ag is also up ~1% across the board. The crypto complex is mixed. Bitcoin is slightly higher while Ethereum down a bit as both challenge their 50d ma 
 

 
Earnings:

• After-Market: ATGE, AXS, CALX, CBAN, CCS, CHRW, CLS, CNMD, DLX, ELS, ETD, FICO, HLI, HXL, IBM, LBRT, LC, LEVI, LRCX, LUV, LVS, META, MSFT, MTH, MUR, NFG, NLY, NOW, RJF, SLG, TSLA, URI, WHR, WM
• Pre-Market (Thrs): AMP, AOS, BBT, BC, BFH, BIP, BX, CAT, CFR, CNX, CRS, CSW, DOV, DOW, EXP, FFWM, GPI, HON, HZO, IP, KEX, LAZ, LHX, LMT, MA, MAN, MO, NDAQ, NSC, OSK, PH, PHM, RCL, SBSI, SHW, TAL, TMO, TT, VIRT, VLO
• After-Market (Thrs): AAPL, ABCB, AJG, AX, BZH, CVLG, DECK, DLB, DXC, EMN, FHI, FPH, HIG, IVR, KLAC, MTX, OLN, ORC, PFSI, PMT, RHI, RMD, SNDK, SNDR, SXI, SYK, V, WDC, WY

Economic Data:
US:

• Mortgage purchase apps: -0.4% w.w vs prior 5.1%
  • Refis: -15.7% vs prior 20.4%
  • 30yr rate 6.24% prior 6.16%
• Oil Inventories: -2.296M vs 1.75M cons., prior 3.602M
• 2:00 FOMC Rate Decision
• 2:30 Press Conference

 Global:

• Australia CPI: 1.0%/3.8% m.m/y.y vs. 0.7%/3.6% cons., prior 0%/3.4%
• India Industrial Production: 7.8% y/y vs. 5.5% cons., prior 7.2%
• Bank of Canada: Hold at 2.25% as expected