In This Newsletter
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1) Market Update & Analysis
What drove these moves?
Trump’s on and off again tariff threats to pressure the sale of Greenland kept market activity modest. Trump threatened a 10% tariff on goods from European allies such as Denmark, the UK, Norway, Sweden, France, Germany, Netherlands and Finland. These tariffs were going to move to 25% on June 1, 2026. AS the European countries did not budge, Trump called off the tariff threats this week.
The U.S. dollar weakened vs. major currencies and gold hit another record, both consistent with a market that’s still a bit nervous about policy and the ability of the most dominant companies to continue with their well above-average growth rates.
2) Top Finance / Investing News
Earnings Season is Underway and all eyes on AI
Each publicly traded company host a discussion as their quarterly financial results are released. More important than the financial results is what investors can assess regarding the expected future results of the business and broader industry. Because businesses with heavy involvement in AI have very high valuations, investors want to see continued faith in the management teams’ response to what’s coming next. That isn’t what we’ve been hearing so far, causing more anticipation on the remaining earnings releasing over the coming weeks.
3) Economic Update
What happened this week
The Federal Reserve’s goal is to keep our economy stabilized with price stability and maximum employment. To do this, they believe inflation should be around 2%. The reported core inflation rate is currently around 2.8% over the past year.
Expected Impact
Analysts still expect one or two rate cuts this year but being that inflation has slowed below 3%, it looks like the rates will stay the same for now. We will find out soon.
What happened this week
The Federal Open Market Committee (FOMC) is schedule to meet January 27-28th and make a decision on interest rates.
The US GDP (gross domestic product - the total value of all the goods and services produced within a country) will be released on January 29th. If GDP is growing faster than expected, it will shift expectations of future rate changes, earnings, and which sectors are expected to lead market growth this year. High growth favors tech and steady or higher interest rates. Lower growth favors defensive and cyclical stocks and a lower interest rate.
4) Political / Policy Updates
Fed leadership risk is back in focus. There’s buzz around the administration’s desire to replace Jerome Powell as the Fed chair. His term ends in May. This is extremely concerning as the Fed is supposed to be independent, not influenced by the White House. Jerome Powell’s stance against Trumps pressure should give us confidence in the economy. If replaced, there’s little faith the new chair would operate independently like Powell has. The Fed losing credibility in the yes of the public is the last thing we need impacting the market.
Government shutdown effects: Some economic data releases have faced delays/disruptions tied to the shutdown environment.
The data collection process for the the consumer price index (CPI) was halted in October. This means much of the inflation data we received since then contains more estimation than usual. This “data fog” will continue to smooth out as we get updates to data released over the past few months.
Any economic data you’re reviewing shouldn’t be analyzed without references to a long-term trend.
5) S&P 500 Standouts
Live Nation (LYV). Live Nation Entertainment surged 6% on Friday. The DOJ argued before a federal judge that Live Nation is operating a monopoly. Concert venues are punished if they don’t use Live Nation’s wholly owned ticketer, Ticketmaster. Venues that change from Ticketmaster to a rival ticketer are seeing the number of concerts Live Nation promotes a their venues drop significantly. Live Nation expressed confidence that the DOJ will not be successful at forcing a breakup between them and Ticketmaster.
Fortinet (FTNT) gained almost 7% as the cybersecurity industry rebounded. Investors are considering software companies with higher-quality and more stable earnings and growth trajectories.
Check out my analysis of Fortinet I posted to YouTube last year:
6) Chart of the Week
Personal Consumption Expenditures Price Index
As mentioned earlier, the latest PCE is at 2.8% as of November 2025. This is relatively close to the Fed’s inflation target of 2%. The Fed will have to make a decision this week on partial data as the November data was due on December 19th. Since only one month of data will be missing, I don’t think it will impact their decision a great deal.
My prediction is the Fed lower the rate twice this year but will keep rates steady at this week’s meeting. The first rate change will come at one of the next two FOMC meetings (March18-19, May 6-7). Hopefully, the Fed continues to operate independently and not buckle under unethical pressure from Trump.
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