Rian Howlett , Karen Friar and Laura Bratton of Yahoo Finance report the Dow, S&P 500 cap volatile week with back-to-back weekly losses:

US stocks were mixed on Friday, as Wall Street capped a turbulent week stoked by President Trump's heated pursuit of Greenland, while chipmaker Intel (INTC) sank after its earnings disappointment.

The Dow Jones Industrial Average (^DJI) retreated roughly 0.6%. The S&P 500 (^GSPC) rose slightly, and the Nasdaq Composite (^IXIC) gained 0.2%.

All three major indexes posted back-to-back weekly losses.

Intel posted worse-than-expected first quarter guidance late Thursday, raising concerns about its turnaround. The chip giant swung to a quarterly loss as it struggled to meet demand for its server chips used in AI data centers. Shares sank over 16% Friday.t

Stocks recorded weekly losses for the second week in a row as the relief that lifted stocks for two straight days of gains wore off. After a rough start to a holiday-shortened trading week, investors took heart from Trump cooling his Greenland rhetoric and backtracking on proposed tariffs on NATO allies. Trump argued that his moves worked out, as the market was "just about even" for the week.

That said, a shift out of US assets is gaining traction as US-EU tensions weigh on the dollar (DX-Y.NYB). And gold (GC=F) headed toward its best week since 2020, while silver (SI=F) topped $100 per ounce.

Elsewhere, there were signs of progress on the China-US front, as TikTok and ByteDance finally closed a deal with Oracle (ORCL) and others to let it operate in the US. Meanwhile, Beijing has reportedly told China's big techs they can start preparations to order Nvidia's (NVDA) H200 chips, whose imports are currently curbed.

Investors are bracing for a blockbuster earnings week next week, along with the Federal Reserve's meeting and interest rate decision. Trump said Thursday he has a pick for the next Fed chair in mind after wrapping up interviews, and he will name the replacement for Jerome Powell "soon."

Sean Conlon and Pia Singh of CNBC also report the S&P 500 ends Friday little changed, but posts second straight losing week amid wild trading: 

U.S. equities were mixed on Friday, as the Nasdaq Composite extended its gains amid easing geopolitical fears and the Dow Jones Industrial Average underperformed.

The tech-heavy Nasdaq advanced 0.28% and settled at 23,501.24, while the blue-chip Dow lost 285.30 points, or 0.58%, closing at 49,098.71. A nearly 4% slide in Goldman Sachs weighed on the 30-stock index. The broad market S&P 500 eked out a marginal gain of 0.03% to end at 6,915.61.

Nvidia and Advanced Micro Devices were among those supporting the Nasdaq and the S&P 500, climbing 1.5% and more than 2%, respectively. The moves come as people familiar with the matter told CNBC that Nvidia CEO Jensen Huang is planning to visit China in the coming days. Other tech names like Microsoft saw a boost as well.

Intel shares, in contrast, tumbled around 17% after the chipmaker reported a disappointing first-quarter outlook.

The three major averages rallied for a second session on Thursday as investors were appeased by news of easing trade tensions and geopolitical risk.

The indexes began their rebound on Wednesday after President Donald Trump called off his threatened tariffs on the imports of eight European nations — which were set to start Feb.1 — and announced that he and NATO Secretary General Mark Rutte reached a “framework of a future deal with respect to Greenland.” The tariff threat briefly spurred a flight from U.S. assets as investors turned to the “sell America” trade at the start of the holiday-shortened trading week.

Trump had also told CNBC Wednesday that “we have a concept of a deal” with the Arctic island.

“Investors this week welcomed a term that kind of started around Liberation Day or shortly thereafter — the ‘TACO’ trade,’” said Scott Ellis, managing director, corporate credit at Penn Mutual Asset Management. “Maybe investors will look to that in the future as Trump kind of walks back and this administration walks back some of the rhetoric in order to get deals done.”

To be sure, Greenland Prime Minister Jens-Frederik Nielsen said on Thursday he doesn’t know what’s in the “framework” deal that Trump announced, stressing that any such deal must respect Greenland’s sovereignty and territorial integrity.

While the combined gains on Wednesday and Thursday had erased the Dow’s losses from earlier in the week, Friday’s move put it back in the red. The 30-stock Dow fell 0.5% on the week. The S&P 500 lost about 0.4%, while the Nasdaq slipped less than 0.1% in the period — both posted back-to-back losing weeks.

It was another volatile week on Wall Street dominated by President Trump's remarks prior, during and following his visit to the World Economic Forum at Davos.

The only good news is NATO Secretary General Mark Rutte who seems to have Trump's attention managed to strike some sort of deal with respect to Greenland but all sides have yet to formally approve and details remain vague. 

Looking at S&P sectors, Energy and Materials benefited from the geopolitical tensions, gaining 3.3% and 2.1% respectively this week:

Worth noting the iShares Silver Trust (SLV) and SPDR Gold Shares (GLD) had another exceptional week, hitting fresh new record levels on geopolitical turmoil:

 

If you ever needed proof that parabolic charts can get more overbought, there it is, short sellers are getting steamrolled trying to short silver and gold.

Still, there will be a pullback back to the 10-week exponential moving average, that I guarantee you.

Here are the best performing large, mid and small cap US stocks this week (full list for each is here, you need to change exchange):

Once again, micro cap stocks took off the most:

Next week is a big earnings week as the tech powerhouses report, keep an eye on post-earnings reaction because that tells you a lot.

And be careful with stocks that run up too much, too fast headed into earnings, Intel being the perfect example today as it got clobbered 17% following weak earnings:

It will likely pull back some more but the weekly chart remains bullish so don't be surprised if it heads back up at some point and resumes an uptrend.

Alright, let me wrap it up there, been a long week.

Below, Tom Lee, Fundstrat, joins 'Closing Bell' to discuss the week for stock markets, the earnings reports next week and much more.

Next, Jeff deGraaf, Renaissance Macro, joins 'Closing Bell' to discuss the recent breakout in regional banks, how small caps can perform going forward and much more.

Third, Dan Niles, Niles Investment Management, joins 'Fast Money' to talk whats ahead for big tech earnings next week including Apple and Microsoft.

Fourth, 'Fast Money' traders talk precious metal prices continuing to climb.

Lastly, CBC's Power & Politics' Political Pulse Panel breaks down duelling speeches at the World Economic Forum in Davos, Switzerland, this week.

Trump Touts "Total And Permanent" Access To Greenland, While Nobody Has Any Clue What's In The Deal

Trump said on Thursday he had secured "total and permanent" US access to Greenland in a deal with NATO, whose head said allies would have to step up their commitment to Arctic security to ward off threats from Russia and China. 

News of a framework deal came as Trump backed off tariff threats against Europe and ruled out taking Greenland by force, bringing to an end what was brewing to be the biggest rupture in transatlantic ties in decades. Yet despite the optimism, details of any agreement were unclear and Denmark insisted its sovereignty over the island was not up for discussion. EU foreign policy chief Kaja Kallas said the bloc's U.S. relations had "taken a big blow" in the past week, as EU leaders met for an emergency summit.

Greenland's Prime Minister Jens-Frederik Nielsen welcomed Trump's comments but said he was still in the dark on many aspects.

"I don't know what there is in the agreement, or the deal, about my country," Nielsen told reporters in the capital Nuuk. 

"We are ready to discuss a lot of things and we are ready to negotiate a better partnership and so on. But sovereignty is a red line," he said, when asked about reports that Trump was seeking control of areas around U.S. military bases in Greenland as part of a wider deal.

"We cannot cross the red lines. We have to respect our territorial integrity. We have to respect international law and sovereignty."

Meanwhile, speaking to reporters aboard Air Force One on his return from the World Economic Forum in Davos, Switzerland, Trump said a new deal was being negotiated that would be "much more generous to the United States, so much more generous." And while he skirted questions on sovereignty, Trump said: "We have to have the ability to do exactly what we want to do."

Earlier Trump told Fox Business Network the deal would essentially bring "total access" for the United States. "There's no end, there's no time limit."

A source familiar with the matter told Reuters that NATO Secretary General Mark Rutte and Trump had agreed in Davos on further talks between the U.S., Denmark and Greenland on updating a 1951 agreement that governs U.S. military access and presence on the Arctic island. The framework they discussed also calls for prohibiting Chinese and Russian investments in Greenland, the person said.

Another source familiar with the matter said what had been agreed was "a frame on which to build," adding that "anything being reported on specific details is speculative."

Rutte told Reuters in Davos it was now up to NATO's senior commanders to work through the details of extra security requirements.

"I have no doubt we can do this quite fast. Certainly, I would hope for 2026, I hope even early in 2026," he said.

Meanwhile, the country that Greenland (semi-autonomously) belongs to, remains fully in the dark: Danish Prime Minister Mette Frederiksen said no negotiations had been held with NATO regarding the sovereignty of Greenland.

"It is still a difficult and serious situation, but progress has also been made in the sense that we have now got things where they need to be. Namely that we can discuss how we promote common security in the Arctic region," she said.

Speaking later ahead of the emergency summit of EU leaders, Frederiksen called for a "permanent presence of NATO in the Arctic region, including around Greenland."

Kallas said "disagreements that allies have between them, like Europe and America, are just benefiting our adversaries who are looking and enjoying the view."

Finnish President Alexander Stubb said he hoped allies could put together a plan to boost Arctic security by a NATO summit in Ankara in July. British Prime Minister Keir Starmer told Rutte on Thursday that the UK stood ready to play its full part in ensuring security in the Arctic.

After meeting with Rutte, Trump said there could be a deal that satisfies his desire for a "Golden Dome" missile-defence system and access to critical minerals while blocking what he says are Russia and China's ambitions in the Arctic. 

Adding to the confusion, Rutte said minerals exploitation was not discussed in his meeting with Trump, even though Trump said that it has been.Specific negotiations over the Arctic island would continue between the United States, Denmark and Greenland itself, he said.

The 1951 agreement established the U.S. right to construct military bases in Greenland and move around freely in Greenlandic territory. This is still the case as long as Denmark and Greenland are informed of its actions. Washington has a base at Pituffik in northern Greenland.

"It is important to clarify that the U.S. had 17 bases during the Cold War and much greater activity. So that is already possible now under the current agreement," said Marc Jacobsen, a professor at the Royal Danish Defence College.

"I think there will be concrete discussions about Golden Dome, and I think there will be concrete discussions about Russia and China not being welcome in Greenland."

Separately, China's Foreign Ministry told Reuters on Friday that claims China is a threat are "baseless", when asked to respond to the Arctic comments. At the same time, the ministry said that China opposes other countries using it as "an excuse" to push their own agenda.

China has repeatedly said its scientific expeditions in the Arctic and commercial shipping operations in the region followed international treaties and laws, accusing the West of distorting facts and hyping up its activities as clues to military intent. Last week, the state-backed Global Times newspaper said in an editorial that it " firmly opposed attempts by the United States and Europe to label China with terms such as 'military threat,' 'resource grabber' or 'rule breaker' in Arctic affairs."

Eslewhere, the president of the European Parliament said the European Union will likely resume work on a trade deal with the United States after Trump took back his tariff threats. The parliament decided this week to suspend work on the deal because of Trump's threats. However, diplomats told Reuters EU leaders will rethink U.S. relations as the Greenland episode has badly shaken confidence in the transatlantic ties. Governments remain wary of another change of mind by Trump, who is increasingly seen as a bully whom Europe will have to stand up to, they said.

Residents in the Greenland capital, Nuuk, are also wary.

"It's all very confusing," said pensioner Jesper Muller. "One hour we are, well, almost at war. Next hour everything is fine and beautiful, and I think it's very hard to imagine that you can build anything on it."

Nobody asked Muller if he would rather have gotten $10 million and agree, together with the other 57,000 residents, to cede Greenland to the US.

Tyler Durden Fri, 01/23/2026 - 14:20

US Homicide Rate Plummets To 125-Year Low, Group Reports

Authored by Naveen Athrappully via The Epoch Times,

Crime rates continued to fall in 2025, with homicide rates expected to drop to about 4.0 per 100,000 residents, “the lowest rate recorded in law enforcement or public health data going back to 1900,” according to a new report published by the Council on Criminal Justice (CCJ) on Jan. 22.

Based on an analysis of crime trends in 40 large American cities, homicides are down 21 percent from 2024, and 44 percent from the recent peak of 2021, the CCJ said. Last year’s decline in criminal activity numbers would “mark the largest single-year percentage drop in the homicide rate on record,” the group said. The complete 2025 numbers will be reported by the FBI later this year.

“This monumental turnaround is a direct result of President Trump’s unwavering commitment to Make America Safe Again,” said the White House in a statement, touting the numbers as a result of closing the border, deploying a “whole-of-government offensive,” and bringing back order on American streets.

Meanwhile, the decline in homicide has been ongoing. “Over the past eight years,” a CCJ analysis found, “the highest average homicide rate was in 2021—18.6 per 100,000. The 2025 rate (10.4) was 44 percent below that peak.”

Eleven out of the 13 offences covered in the Jan. 22 report saw a decline in 2025 from the prior year, with nine of the offenses falling 10 percent or more. CCJ noted that drug crimes increased during this period by 7 percent, while sexual assaults remained even.

After peaking during the pandemic, carjacking and shoplifting have come down significantly in the country. Reported carjacking has declined 61 percent since 2023, while shoplifting is down 10 percent from 2024.

“This is what happens when you have a president who fully mobilizes federal law enforcement to arrest violent criminals and the worst of the worst illegal aliens,” press secretary Karoline Leavitt said in a post on X. “Promise Made. Promise Kept.”

Since President Donald Trump assumed office last year, the administration has instituted strict law enforcement measures across the country, which include arresting and deporting illegal immigrant criminals, strengthening enforcement against gangs and transnational cartels, disrupting drug trafficking, and securing the southern border.

On Jan. 16, the Customs and Border Protection agency announced zero parole releases along the southwest border in December 2025, compared with 7,041 releases under the prior administration in December 2024. This is the eighth consecutive month of zero releases.

Crimes in US Cities

Overall data from 35 U.S. cities showed the homicide rate dropping by about 21 percent in 2025. There were declines in 31 of the 35 cities, with roughly 40 percent drops reported in Denver; Omaha, Neb.; and Washington.

Three cities that registered an uptick in the homicide rate were Little Rock, Ark., up 16 percent; Fort Worth, Texas, up 2 percent; and Milwaukee, up 1 percent.

“The overall reduction in crime, especially homicide, is welcome news,” said CCJ senior research specialist Ernesto Lopez, lead author of the report, adding that there was a trend of homicide rates declining since the late 2000s.

CCJ President and CEO Adam Gelb said that it was difficult to “pinpoint what’s actually driving the drop” but noted there have been “big swings in criminal justice policies, programs, and rhetoric, big advances in crime-fighting technologies, and big social, economic, and cultural shifts all happening at the same time.”

CCJ is a nonpartisan think tank based in Washington.

Department of Homeland Security Secretary Kristi Noem lauded the administration’s first year of law enforcement efforts in a Jan. 20 post on X.

“In President Trump’s first year back in office, nearly 3 million illegal aliens have left the U.S. because of the Trump administration’s crackdown on illegal immigration, including an estimated 2.2 million self-deportations and more than 675,000 deportations,” Noem said.

“In the last year, fentanyl trafficking at the southern border has also been cut by more than half compared to the same period in 2024. The U.S. Coast Guard alone seized enough cocaine to kill more than 177 million Americans.”

Furthermore, Immigration and Customs Enforcement arrested about 7,000 gang members in 2025.

According to a Jan. 19 post by FBI Director Kash Patel, there has been a 20 percent drop in the murder rate nationwide. About 1,800 gangs and criminal enterprises operating in the country have been disrupted.

Tyler Durden Fri, 01/23/2026 - 14:00

Beijing Tells Alibaba, Tencent, ByteDance To Prepare Nvidia AI Chip Orders

Chinese regulators are nearing approval for Nvidia's H200 AI chips for top domestic tech firms, including Alibaba, Tencent, and ByteDance, signaling Beijing is moving closer to formally green-lighting imports of last-generation AI accelerators, according to a Bloomberg report.

Approval would represent a material bull catalyst for Nvidia stock and a major win for CEO Jensen Huang, who has stated that the China AI chip opportunity alone could generate up to $50 billion in revenue over the coming years.

This report is notable given Nvidia shares have recently stalled below the $200 level. Any resumption of H200 shipments to China would potentially reignite upside momentum.

The Bloomberg report noted:

The companies are now cleared to discuss specifics such as the amounts they would require, the people said, asking to remain unidentified discussing private talks.

The report did reveal one caveat:

Beijing will encourage companies to buy a certain amount of domestic chips as a condition for approval, according to the people, though no exact number has been set.

H200 is a last-generation chip that the Trump administration has allowed to be exported to China. There have been a number of reports in recent weeks telegraphing the move by Chinese regulators:

• China To Limit Nvidia's H200 Chip Access After Trump Greenlights Exports

• Nvidia Prepares To Ship H200 AI Chips To China By Mid-February

• China Set To Approve Nvidia H200 AI Chip Purchases As Soon As This Quarter

• ByteDance Plans $14 Billion Nvidia H200 AI Chip Buying Spree As Computing Demand Soars

Beijing appears set to approve imports of Nvidia's H200 chips for major tech firms, while still prioritizing the buildout of domestic AI semiconductor production. This move only suggests a very real admission that China cannot yet meet domestic AI compute demand and must rely on downgraded US chips from Nvidia.

Tyler Durden Fri, 01/23/2026 - 13:40

Forget Trump and Greenland. Howard Lutnick Gave The Davos Speech That Mattered

Authored by Matt Taibbi via Racket News,

After Donald Trump spoke at the World Economic Forum in Davos this week, the obligatory headline term was humiliation. “Lonely Trump Humiliated as Major Allies Refuse to Be Bullied,” was one of two Daily Beast stories on the theme, the other being “Trump, 79, Croaks Through ‘Peace’ Grift Speech After 48 Hours of Ritual Humiliation,” under the tag BORED OF PEACE. Jen Psaki on MSNOW chortled over his “humiliating ramble,” while Chris Hayes declared him “isolated and humiliated.”

Coverage of Trump long ago devolved into an homage to Pee Wee’s Playhouse, when comic Paul Reubens would get a secret word from Conky the robot in each show. After, audiences would have to shout in unison at every mention of it. I remember being in a room of stoned teenagers shouting “PLACE!” at the TV in 1986.

Trump news cycles are the same, only anchors shout TREASON! or FELON! or DICTATOR! His address on Greenland, NATO, and Emmanuel Macron’s sunglasses was blasted for a hundred reasons, many legitimate, but the real drama came from a non-Trump speech. Commerce Secretary Howard Lutnick ripped his European hosts by declaring “Globalization has failed”:

Globalization has failed the West and the United States of America. It’s a failed policy. It is what the WEF has stood for, which is export offshore, far-shore, find the cheapest labor in the world and the world is a better place for it. The fact is, it has left America behind. It has left the American worker behind. And what we are here to say is that America First is a different model—one that we encourage other countries to consider—which is that our workers come first. We can have policies that impact our workers.

Pop quiz: how was the previous President received at Davos? He wasn’t. Joe Biden was the first president this century to skip the WEF. It was just fine with world plutocrats that the United States was piloted by a wandering outpatient. The last major American Davos speech pre-Trump was delivered in 2024 by National Security Adviser Jake Sullivan, an unelected spooktocrat who declared that “major powers are vastly more interdependent than in any time during the Cold War” and pledged to stiffen “our ranks” at NATO. He earned nervous applause. German Finance Minister Christian Lindner meanwhile let the cat out of the bag, chiding European leaders that a possible Trump return required preparing for “fair burden sharing” under NATO, developing “capabilities to defend ourselves,” and returning to intra-European “competitiveness” economically. This damning speech was a de facto admission that Europe had been enjoying a world without American “competitiveness” for ages.

Lindner was preparing Europe for this week’s speech by Lutnick, which told Davosians the free ride was over. In onstage remarks and at an invitation-only dinner, the Commerce chief and longtime head of the Cantor Fitzgerald investment bank slammed former American pols for submitting to “lies”: that “offshoring was necessary, borders were not, and our national interest needed to submit to global lower cost of labor.” These remarks generated event-wide outrage, even inspiring Al “He’s Still Alive?” Gore to start booing and European Central Bank chief Christine Lagarde to walk out, though some dispute this.

Trump was abrasive and insulting and no one budged. Lutnick was rational and clear, and the WEF attendees who didn’t throw fits cried anonymously to media. Trump is surely hated, but on Planet Davos the most unforgivable sin is abandoning the globalism gravy train in favor of a return to national-interest politics.

J.D. Vance’s much-derided speech at a Munich security conference last February was meant to declare an end to the Atlantic security dream while knocking Europe for abandoning free speech and democratic rights. It could have been historic, if the Trump administration had held up its end of the civil liberties bargain. The Lutnick speech is a similar moment. If it really marks the end of the globalization project, that will be a huge victory, no matter how insane our current political situation is. Think about the journey we’ve traveled in ten years:

Subscribers to Racket News can continue reading here...

Tyler Durden Fri, 01/23/2026 - 13:20

Olympic Snowboarder Turned "Cocaine Kingpin" Arrested In Mexico, Flown To US To Face Justice

Former Olympic snowboarder Ryan Wedding, who was wanted by the FBI for allegedly leading a violent international drug trafficking operation, has been arrested, the Justice Department announced Friday.

Wedding, 44, had been added to the FBI’s 10 Most Wanted Fugitives list in March. He was taken into custody in Mexico on Thursday night and was being transported to the United States, FBI Director Kash Patel said in a post on X.

U.S. authorities believe he had lived in Mexico for more than a decade, according to Yahoo. 

“This is a huge day for a safer North America, and the world,” Patel said.

Thanks to President Trump’s leadership and commitment to global law enforcement - as of this morning, the DOJ/FBI officially apprehended our SIXTH Top Ten Most Wanted Fugitive within the last year. Thank you to @AGPamBondi for her relentless pursuit of justice, the US Attorney’s… pic.twitter.com/fnSP4IXQRI

— FBI Director Kash Patel (@FBIDirectorKash) January 23, 2026

Attorney General Pam Bondi also confirmed the arrest, writing on X, “At my direction, @FBI agents have apprehended yet another member of the FBI’s Top Ten Most Wanted List: Ryan Wedding, the onetime Olympian snowboarder-turned alleged violent cocaine kingpin.”

U.S. officials had previously compared Wedding to notorious drug lords Pablo Escobar and Joaquín “El Chapo” Guzmán. More details about the arrest are expected at a news conference in California later Friday.

According to a federal indictment unsealed in November, Wedding faces nine charges, including conspiracy to distribute, possess, and export cocaine, conspiracy to commit murder linked to a criminal enterprise, witness tampering, and money laundering.

At my direction, Department of Justice agents @FBI have apprehended yet another member of the FBI’s Top Ten Most Wanted List: Ryan Wedding, the onetime Olympian snowboarder-turned alleged violent cocaine kingpin.

Wedding was flown to the United States where he will face justice.…

— Attorney General Pamela Bondi (@AGPamBondi) January 23, 2026

Prosecutors say his network moved hundreds of kilograms of cocaine from Colombia through Mexico and Southern California to Canada and other parts of the United States. He is also accused of ordering multiple killings connected to the drug operation.

The Bureau's Sam Cooper reports that their American law-enforcement sources argue that Wedding's success involved leveraging cross-border trucking enterprises captured by Indo-Canadian mafia networks, and that Canada's police and judicial response failed to counter the threat.

"Over the last three or four years there've been Canadians killed in the Yucatán. And we all know they're tied to drug trafficking — Greater Toronto and Montreal," a senior U.S. investigator told The Bureau for an exclusive report last year, on the improbable rise of a Canadian to the heights of Mexico's most powerful cartel.

"A fair number of Quebecers too — bikers. They all work in Mexico. But somehow Ryan Wedding got all these people to work together."

The source described the Cancún area as a "haven for Canadian organized crime — mid- to high-level drug dealers coordinating with Mexican counterparts to bring stuff into Canada."

Wedding, known by aliases such as “El Jefe,” “Giant,” and “Public Enemy,” represented Canada at the 2002 Winter Olympics in Salt Lake City, where he placed 24th in the parallel giant slalom.

Yahoo reported that when he was added to the most wanted list, Akil Davis, assistant director of the FBI’s Los Angeles field office, said, “Wedding went from shredding powder on the slopes at the Olympics to distributing powder cocaine on the streets of U.S. cities and in his native Canada. The alleged murders of his competitors make Wedding a very dangerous man.”

Authorities had said they believed Wedding was living in Mexico under the protection of the Sinaloa cartel.

The U.S. State Department initially offered a $10 million reward for information leading to his capture, later increasing it to $15 million. In November, the Justice Department also announced 10 related arrests under “Operation Giant Slalom.”

Tyler Durden Fri, 01/23/2026 - 13:00

The Rules‑Based Order That Once Constrained Great‑Power Ambition Has Proved Illusory

By Stefan Koopman, senior macro strategist at Rabobank

If there is one lesson from this week, it is that the rules‑based order that once constrained great‑power ambition has proved illusory. In Davos, Canada’s Mark Carney captured this with clarity. The world, he argued, is experiencing a rupture rather than a transition. It has become a harsher place in which the strong test limits and the weak are expected to accommodate them. In such an environment, middle powers should stop “living within a lie” and make moves toward strategic autonomy and diversified dependencies.

The following 24 hours offered a textbook illustration of how this new world works, or fails to. President Donald Trump abruptly stepped back from his tariff barrage aimed at eight European allies. Talk of forcing the issue over Greenland was quickly shelved after a meeting with NATO secretary‑general Mark Rutte produced a “framework for a future deal”. Markets regained their footing on Thursday after losses earlier this week, following the familiar TACO pattern with a snapback in risk assets. US Treasuries just stabilized while the dollar weakened, leaving a residual Sell‑America tone.

Details remain scarce, but two strands are emerging:

• First, a NATO mission under US command appears likely, involving the alliance’s Arctic members (incl. Sweden and Finland, who can bring their unique expertise) and possibly others, to strengthen regional defense. This outcome was already very much possible under the 1951 US‑Denmark defence agreement, which grants Washington broad scope to deploy military assets on Greenland, without the diplomatic damage caused by the earlier escalation.  
• Second, the understanding also appears to reflect Washington’s longer‑term concern about Greenland’s political future. A fully independent Greenland could, in theory, seek closer economic or security ties with Russia or China. A revised or reinterpreted framework would aim to ensure that any future change in Greenland’s status did not lead to the withdrawal of permission for US military activities on the island. This is particularly relevant to US missile‑defence ambitions, including the proposed “Golden Dome”.

Of course this would require sign-off from Denmark and Greenland – not NATO – and how any of this would be implemented remains unclear. As such, tariff threats may return if the eventual proposal falls short of US demands.

Seen in that light, reading the episode as détente would be an error. The US’ pressure on “irrelevant” Denmark’s sovereignty is an assertion of primacy framed as pragmatism, with tariffs as the go‑to tool. The subsequent Trump‑Rutte arrangement does not at all mark a return to rules or procedures.

By now, the White House bargaining style is well-established and likely to recur in the not too distant future. The belittlement draws the international attention and the projection of pain functions as its leverage.

The beatings will continue until morale improves, but this abusive dynamic is unproductive: the stated US strategy of wanting a ‘stronger Europe’ to balance China sits awkwardly with tactics that erode mutual trust, seek to split European unity, and invite defensive hedging with other – not necessarily like-minded – parties. Moreover, it may cause Europe’s learned helplessness, its perennial reflex of waiting for Washington to set the terms, to be unlearned in practice. The defense build‑up (possibly including nukes), the internal‑market push and the widening of trade options, Mercosur included, indicate a structural adjustment. If one of the US’s key strengths since the end of the Second World War is having had strong alliances and soft power, it may underestimate the long-term consequences. Trump said the US will remember if the Danes don’t play ball; but so will Europe.

Indeed, on Mercosur, after the European Parliament failed to ratify this agreement on Wednesday, the Commission is now signalling that provisional application is the likely way forward, which is just another indication of the growing role of geopolitics in Europe’s trade strategy.

Tyler Durden Fri, 01/23/2026 - 12:40

"Screw You Guys, I'm Going Home!": The South Park Market Of 2026

Authored by Lance Roberts via RealInvestmentAdvice.com,

I have been a “South Park” fan for as long as I can remember, and while the show isn’t a market guidebook, its brutal satire cuts through nonsense better than many Wall Street commentaries. Just like on the show, characters make absurd decisions and face absurd consequences, which is familiar to investors today. For example, one of my favorite scenes is when Stanley goes to the bank to deposit the money his Grandmother gave him into an account at the bank…“And It’s Gone.”

Notably, in South Park, Eric Cartman once declared, “Screw you guys, I’m going home.” That line has become shorthand for frustration and fatigue when chaos overwhelms you during market volatility. For example, during the “Liberation Day” market decline, many investors sold out just as the market reached its bottom. The increase in market volatility was something we wrote about this time last year in “Curb Your Enthusiasm.” Notably, the same market dynamics that existed then persist today. Such suggests that investing in 2026 may also experience similar increases in volatility. That means anyone looking for a simple road map will end up feeling like Cartman walking out on his friends.

To avoid being Cartman, it is critical to understand that 2026 will not deliver certainty. Instead, investors should focus and make decisions based on probabilities backed by data, earnings trends, policy shifts, and macro signals. Wall Street analysts have already begun issuing universally bullish forecasts, some more cautious than others. However, while there are no guarantees of outcomes, a shifting environment of volatility and complexity is expected.

This article breaks the 2026 outlook into three cornerstone sections:

1. Market Structure and Valuations

2. Economic Forces and Policy Drivers

3. Strategic Investment Implications

Across each section, you will see the same economic truth South Park illustrates: Chaos is not the opposite of order. Chaos is part of the system.

Market Structure and Valuations in 2026

Wall Street begins 2026 with conflicting signals. As noted above, while several Wall Street firms expect to see another year of “double-digit” gains in 2026, such follows three consecutive years of elevated gains. That is potentially a risk as discussed in the “Market Outlook For 2026,”

“The current 3-year return is 18% above its 3-year average. While that is not the highest level on record, when the index trades significantly above its moving average, volatility tends to rise. These periods often see sharp drawdowns, and corrections become more frequent, with increased variance in returns leading to larger losses in downturns, which compounds the problem. Secondly, there are declining risk-adjusted returns. When returns deviate significantly from the trend, future returns tend to revert toward the mean. This mean reversion is driven by stretched valuations resetting. Over time, high volatility and large price swings reduce compound returns. Even if average returns remain positive, the math of compounding is compromised by losses, weakening full-cycle gains.”

Secondly, the markets currently trade at record levels above their long-term exponential growth trend. As shown in the chart below, when valuations rise unchecked, the market grossly exceeds its long-term exponential growth trend, eventually leading to a reversion.

Lastly, valuations remain above long‑term historical norms. Crucially, as discussed in a recent #BullBearReport:

“Market valuation measures are just that—a measure of current valuation. Moreover, market valuations are a much better measure of “investor psychology” and a manifestation of the “greater fool theory.” This is why a high correlation exists between one-year trailing valuations and consumer confidence in higher stock prices.”

Simply, this means that current valuations are just a reflection of the “hope” that future earnings growth and profitability will justify overpaying for assets today. Wall Street’s 2026 forecast for the markets represents that “hope.”

However, what we do know today is that the most powerful force in finance is “mean reversion.” As all the charts above demonstrate, at some point over the next five years, market returns will likely be closer to 0% than 10%.

Of course, that doesn’t mean markets will “crash” in 2026. However, price deviations, excess valuations, and elevated sentiment do suggest that market volatility will likely be higher and returns lower than current expectations. Such is particularly the case if something happens that causes Wall Street to lower forward earnings expectations. It is worth noting that historically, valuations have not always caught up with earnings, but rather vice versa.

That scenario is when the Cartman line feels most appropriate: “Screw you guys, I’m going home.” Because investors will shift from an optimistic to a defensive position almost instantly.

Drivers Shaping 2026

Markets do not exist in a vacuum. Earnings “expectations” are what will matter the most, but earnings are influenced by macro forces such as inflation, interest rates, global growth, and monetary policy. Currently, many of those factors are not favorable to those more elevated forecasts.

For example, inflation remains a central concern with major investment banks and strategists cautioning that inflation may hover above the Federal Reserve’s 2% target as the labor market weakens. Jerome Powell even noted this in the December FOMC policy statement. During Powell’s press conference, he emphasized that job gains have slowed and downside risks to employment have increased. That statement aligns with our recent article on how alternative employment sources may affect its outlook. Powell went further, suggesting official payroll figures likely overstate job growth by around 60,000 jobs per month. That implies an actual labor market contraction. It further acknowledges that the potential negative payroll growth was a pivotal signal of the Fed’s priorities.

Such is crucial to forward expectations, because the markets are closely tied to both fiscal and monetary actions. While the Fed signaled possible rate cuts in 2026, if inflation does not subside as expected, rate cuts may be limited or postponed, which would negatively impact investor confidence. Famed investors often warn that policy surprises matter more than policy intentions, especially when markets are priced for optimism.

Secondly, internationally, growth forecasts are uneven. Credit rating agencies project moderate but uneven expansion across major economies, with emerging markets often outpacing developed markets in GDP growth. That imbalance creates divergence in asset returns and credit flows. However, given that the Euro area is expected to grow at roughly half the rate of the US, it would be unsurprising to see 2025’s outperformance by international markets, relative to the US, reverse.

In such environments, currency fluctuations and trade dynamics become even more crucial, meaning that a strong U.S. dollar rally or slowing global trade could pressure multinational earnings even if domestic sales hold up.

Lastly, leverage is a growing risk of market volatility disruption. As we discussed in “The DPI Link To Margin Debt,” household allocations to equities are at a record. Of course, such should be unsurprising given the strong market advances over the past few years.

However, this surge in allocations has also been accompanied by a massive expansion in leverage. Currently, margin debt as a percentage of real DPI has been reported at around 6.23 %, the highest on record. This ratio also suggests that for every $100 of real DPI, roughly $6 of margin debt is outstanding, a substantial amount. But that number doesn’t include the additional leverage taken on by investors through speculative option trading and 2x and 3x leveraged ETFs, which are also being bought on margin.

As we concluded:

“Naturally, when fresh savings are lacking and investors turn to margin to participate in markets, two risks emerge.“

1. The quality of the investor base weakens because borrowed money replaces savings.

2. The carrying cost of that borrowing becomes more salient when interest rates are elevated. If the margin debt carries higher interest and investors’ income growth is weak, servicing the debt becomes harder, reducing the buffer against loss.

“In summary, weak DPI growth, combined with elevated margin borrowing, creates a vulnerability. In such an environment, the investor base is much less resilient.”

Does any of this mean the markets are going to crash in 2026? No.

However, investors should be aware that all these forces interact in complex ways. Recognizing that macroeconomic data releases, policy shifts, and geopolitical events can lead to short-term volatility and long-term trend adjustments is crucial for navigating the “South Park” market in 2026.

South Park Wisdom for Investors

South Park often shows characters reacting emotionally to chaos. Yet mature investors must behave differently and recognize that emotion is not a strategy. However, understanding the data, identifying the probabilities versus possibilities, and maintaining risk controls are critical to success in 2026.

If you feel like shouting, “Screw you guys, I’m going home,” in the face of market moves, take a beat. Markets do not need your commitment; they reward discipline and patience.

In 2026, implement portfolio tactics to participate with the market if the bullish forecasts come to fruition, but protect your wealth in case they don’t.

• Diversify beyond tech leaders: Shift allocations gradually toward underappreciated sectors, such as healthcare, industrials, energy, and consumer staples, which demonstrate earnings strength and stable demand.

• Rebalance quarterly: Trim overextended positions, especially in momentum names. Reallocate into lagging but fundamentally sound assets.

• Build cash buffers: Hold 5% to 15% in short‑duration cash equivalents to deploy during volatility or price dislocations.

• Use tactical hedges: Add protective puts or inverse ETFs to limit downside on core equity holdings in concentrated portfolios.

• Add exposure to high‑quality bonds: Reallocate from speculative credit into high‑grade corporate or Treasury ladders as yields remain favorable.

• Favor earnings momentum over hype: Focus on stocks delivering real EPS growth over those driven by thematic speculation or valuation expansion alone.

• Reduce concentration in crowded trades: Limit exposure to AI and mega‑cap tech where positioning is crowded and narrative risk is high.

• Be cautious with international diversification: Developed market and emerging market ETFs are at risk of slower future growth and may be overvalued relative to their respective economies.

• Adjust risk models for higher volatility: Updating drawdown expectations and rebalancing portfolio risk targets accordingly.

• Track earnings revisions monthly: Stay nimble and reduce positions in companies issuing weaker forward guidance or showing margin compression.

• Treat narratives as signals, not strategies: Use themes like AI, reshoring, or inflation narratives to inform ideas, but confirm with real data and balance sheet strength.

These actions position your portfolio for resilience, rather than reliance on a single scenario, while preserving flexibility to capitalize on market shifts throughout 2026. Like any complex system, markets blend risk and opportunity. Recognizing where probability exceeds speculation is the difference between reacting like Cartman and investing with purpose.

Stay informed, stay disciplined, and treat “chaos” as part of the landscape, not a reason to abandon the field.

That is how you navigate the market in 2026.

Tyler Durden Fri, 01/23/2026 - 10:20

UMich Sentiment Bounces To 5-Month High As Democrats Realize Their Insane Inflation Fears Were Wrong

Having ended 2025 at the lowest Current Conditions Sentiment levels in, well, ever... expectations for preliminary January data were for a modest rebound... and it did...notably more than expected (and a pick up from the flash print):

• The preliminary January sentiment index climbed to 56.4 from 52.9 in December, according to the University of Michigan (better than the 54.0 expected and 54.0 flash print).

• The expectations index rose to a six-month high of 55.4. The survey reflected improvements in both the short- and long-term economic outlooks.

• The current conditions gauge climbed to a three-month high after slipping to a record-low in December. Consumers’ perception of their current financial situation improved in January, while expectations declined.

That is the best headline print since August (highest expectations since July)...

Source: Bloomberg

While the overall improvement was small, UMich Survey Director Joanne Hsu admits "it was broad based, seen across the income distribution, educational attainment, older and younger consumers, and Republicans and Democrats alike."

Year-ahead inflation expectations fell back to 4.0% this month. This is the lowest reading since January 2025...

Source: Bloomberg

Uncertainty over short-run inflation expectations, as measured by the interquartile range of responses, has fallen from mid-2025 but has remained considerably elevated in recent months, comparable to levels seen in 2022

Source: Bloomberg

And it appears that Democrats have come to their senses over the fears of runaway Trump tariff inflation...

Source: Bloomberg

Aside from tariff policy, consumers do not appear to be connecting foreign developments to their views of the economy. Hsu notes that interviews for this release concluded on January 19th, two days after Trump’s social media post announcing additional tariffs on eight countries in Europe.

Tyler Durden Fri, 01/23/2026 - 10:10

"The Expansion Has Cooled": US Manufacturing, Service PMIs Both Miss, Signal 1.5% GDP Growth

With global PMIs today printing on the softer side (especially in France where the service PMI tumbled to 47.9 on expectations of a 50.3 print), moments ago it was the US' turn to join the parade of soggy prints. Here is what S&P Global reported for the January Prelim PMIs:

• Manufacturing PMI: 51.9, up from 51.8 in Dec, but missing estimates of 52.0
• Services PMI: 52.5, unchanged from December's 52.5, and also missing estimates of 52.9
• Composite PMI Output Index: 52.8, up from December's 52.7), and also missing estimates of 53.0

While US business activity growth ticked higher in January, it remaining subdued compared to the typical rate of expansion seen in the second half of 2025, according to the PMI report. Manufacturing growth accelerated to outpace that of services, but the January survey brought further signs that underlying order book growth has softened in both sectors recently, led by falling exports. Job numbers consequently remained little changed in January.

Curiously, when taking a closer look at the data, we find improvement across both employment and inflation: 

Employment rose in January following a similarly weak increase reported in December. The near-stalled job market reflected concerns from companies over rising costs and softer sales growth in recent months. Only a marginal rise in payroll numbers was reported across the service sector while manufacturing jobs growth weakened to a sixmonth low. Some companies also continued to report difficulties finding staff, often struggling to fill vacancies and meet demand. These capacity issues contributed to the largest rise in backlogs of work since last August, albeit largely confined to the service sector.

Also, so much for inflation: input costs moderated from December’s seven-month high to sit at the weakest since last April. The moderation reflecting a cooling of input cost inflation in the service sector, as manufacturing input prices rose at the fastest pace since last September, once again widely blamed on tariffs. 

Commenting on the report, S&P GMI chief economist, Chris Williamson, said that "The flash PMI brought news of sustained economic growth at the start of the year, but there are further signs that the rate of expansion has cooled over the turn of the new year compared to the hotter pace indicated back in the fall."

 "The survey is signalling annualized GDP growth of 1.5% for both December and January, and a worryingly subdued rate of new business growth across both manufacturing and services adds further to signs that first quarter growth could disappoint."

"Jobs growth is meanwhile already disappointing, with near stagnant payroll numbers reported again in January, as businesses worry about taking on more staff in an environment of uncertainty, weak demand and high costs."

 "Increased costs, widely blamed on tariffs, are again cited as a key driver of higher prices for both goods and services in January, meaning inflation and affordability remains a widespread concern among businesses."

Confidence in the year ahead outlook meanwhile remained positive but dipped slightly lower, as hopes for sustained economic growth and favorable demand conditions were somewhat offset by ongoing worries over the political environment and higher prices.

While elevated rates of input cost and selling price inflation were again commonly attributed to tariffs, especially in the manufacturing sector, where price pressures intensified in January, service sector inflation moderated, linked in part to intensifying competition.

Tyler Durden Fri, 01/23/2026 - 10:00

Why Is "Canadian Warren Buffett" Panic-Buying Under Armour Stock

Our shift in coverage on Under Armour began in late September, when we flagged a UBS report from analyst Jay Sole, who forecasted a major inflection point for the long-struggling Baltimore-based apparel company. Sole argued that sentiment would turn positive in FY27, setting the stage for stock outperformance. That bullish thesis has certainly seen its timeline accelerated, with a surge in heavy insider buying igniting a sharp rally this month.

Shares of UAA have surged this month, with year-to-date gains of 27.5%.

If these gains hold through year-end, it would mark the best year for Kevin Plank’s company since 2014.

Let's begin with UBS analyst Sole's inflection point call after a ten-year bear market:

Then what really piqued our interest was Fairfax Financial Holdings’ disclosure earlier this month of a 22.2% ownership stake in UA, making it the company’s largest shareholder.

Insider buying has continued. Bloomberg insider transaction data shows Fairfax Financial continues to panic-buy UA stock, with 5 million more shares disclosed on Wednesday. Last week, the firm bought 3.61 million shares.

Latest data from Bloomberg shows a sudden surge in Fairfax Financial's buying spree, with total shares nearly 42 million, at a market value of $266 million. Fairfax Financial is run by Prem Watsa, often called "Canadian Warren Buffett."

The timing of Fairfax Financial's UA buying spree comes as the company is in a turnaround pattern.

Latest UA developments:

• Data breach probe: Under Armour is investigating claims of a November data breach allegedly impacting about 72 million email addresses

• Leadership changes: Effective February 2, Kara Trent becomes Chief Merchandising Officer and Adam Peake is named President, Americas.

Street Views

• Citi: Raised price target to $6.50 from $5, kept Neutral.

• Truist: Raised target to $6 from $5, kept Hold.

We must also point out that Bloomberg data has UA's float 35% short. A squeeze candidate for sure.

Tyler Durden Fri, 01/23/2026 - 09:45

Trump Withdraws Invitation For Canada's Carney To Join Board Of Peace

Authored by Omid Ghoreishi via The Epoch Times,

U.S. President Donald Trump has withdrawn his invitation for Canadian Prime Minister Mark Carney to join the U.S.-led Board of Peace that will initially focus on rebuilding Gaza.

“Please let this Letter serve to represent that the Board of Peace is withdrawing its invitation to you regarding Canada’s joining, what will be, the most prestigious Board of Leaders ever assembled, at any time,” Trump said in a post on Truth Social addressed to Carney late on Jan. 22.

“Thank you for your attention to this matter!”

The notification comes after the two criticized each other’s comments on U.S.–Canada and international relations in public speeches this week.

Carney criticized U.S. pressure to take over Greenland in a speech at the World Economic Forum (WEF) in Davos, Switzerland, on Jan. 20, and called for countries to not comply with “great powers,” saying the rules-based international order has undergone a “rupture.” He urged middle powers to band together to resist pressure from major powers, without specifying who the major powers are or making any distinctions.

“Great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited,” he said.

“You cannot live within the lie of mutual benefit through integration, when integration becomes the source of your subordination.”

His comments came amid increasing U.S. protectionist measures and days after his visit to China, where he said a new strategic partnership with Beijing sets “us up well for the new world order.”

In his own speech at the WEF on Jan. 21, Trump said that he listened to Carney’s speech and that the Canadian prime minister “wasn’t so grateful,” adding that Canada “lives because of the United States.”

“Canada gets a lot of freebies from us, by the way, they should be grateful also, but they’re not,” Trump said.

“Canada lives because of the United States. Remember that, Mark, the next time you make your statements.”

A day later in a speech addressed to Canadians on Jan. 22, Carney rebuked Trump’s remarks, saying Canada “does not live because of the United States. Canada thrives because we are Canadian.”

Also on the same day, U.S. Commerce Secretary Howard Lutnick said Ottawa could risk jeopardizing the upcoming renegotiations of the United States-Mexico-Canada Agreement (USMCA) by seeking closer relations with China.

Lutnick suggested that Carney’s recent comments may be related to an upcoming election. He added that Ottawa’s decision to open Canada’s market to Chinese electric vehicles (EVs) may have an adverse impact on Canada’s free-trade relations with the United States, which he said is the “second-best deal” with the United States in the world after Mexico’s.

During his trip to China last week, Carney agreed to cut tariffs on Chinese EVs from 100 percent to 6.1 percent for the first 49,000 imported units, in exchange for Beijing cutting tariffs on Canadian agricultural products from 85 percent to 15 percent until at least the end of 2026.

Board of Peace

Trump’s Board of Peace inaugurated earlier on Jan. 22, with representatives from 19 nations joining the U.S. president at the WEF for the official launch of the initiative. The founding members are mainly Asian, with representatives from some other parts of the world including Hungary, Argentina, and Paraguay joining as well.

Other European leaders including Russian President Vladimir Putin have also been invited to join, but they haven’t yet officially accepted the invitation.

Carney said last week that he had agreed in principle to join the board, adding that details such as financing still need to be worked out. Canada’s Finance Minister François-Philippe Champagne said this week that Ottawa had no intention of paying $1 billion to join the initiative, an amount a U.S. official had cited as the entry fee, which would be used to help Gaza.

Carney is the only world leader Trump publicly informed that his invitation to join had been rescinded.

The Epoch Times contacted the prime minister’s office for comment but didn’t immediately hear back.

Souring Relations

Trump’s remarks this week mark the first time he has publicly rebuked Carney, whom he had earlier addressed very cordially.

In his first administration, Trump publicly clashed with former Canadian Prime Minister Justin Trudeau on multiple occasions. At the conclusion of the June 2018 G7 meeting in Quebec, Trudeau told reporters he would not hesitate to respond to U.S. tariffs with retaliatory measures. Trump later countered by saying that Trudeau “acted so meek and mild” during the meeting and only made those comments once Trump had departed. A year later, during a NATO meeting in the UK, Trudeau was caught on a hot mic seemingly mocking Trump in front of other world leaders for holding a lengthy press conference. Trump later fired back by calling him “two-faced.”

Leading up to his second term, Trump repeatedly referred to Trudeau as “governor,” implying that Canada should be another U.S. state, while Trudeau said there “isn’t a snowball’s chance in hell that Canada would become part of the United States.”

During his election campaign last year, Carney heavily focused his campaign on responding to Trump, saying that Trump is “attacking Canadian families, workers and businesses” with “unjustified tariffs.”

After the election, however, he significantly toned down his comments on Trump, and dropped Canada’s counter-tariffs in a bid to prompt Washington to continue negotiations with Canada on trade and ease tariffs.

For his part, Trump on multiple occasions praised Carney. “I like Carney a lot, I think he is a good person,” Trump said during a meeting with the Canadian prime minister in Washington in August 2025. Carney has also had words of praise for Trump, calling him a “transformational president” in how how he has dealt with China, during another meeting with the U.S. president in Washington in May 2025.

Even when criticizing the anti-tariff ads featuring a speech by former U.S. President Ronald Reagan run by Ontario in the United States, Trump said that he has a very good relationship with Carney. “I like him a lot,” Trump said in October 2025.

The U.S. president suspended trade talks with Canada over the ad. Carney later said the two countries were close to a trade agreement had it not been for the ads. No new deal has been reached since then, and Ottawa now has its sights set on renegotiating the USMCA this year.

During an earlier televised address to Canadians in October 2025, Carney again used stronger language against the U.S. administration, echoing remarks from the election campaign, saying Canada’s “relationship with the United States will never again be the same as it was.” He largely avoided similar comments in public addresses afterward, before returning to the theme in remarks to world leaders in Davos on Jan. 20 and again to Canadians on Jan. 22.

Tyler Durden Fri, 01/23/2026 - 09:25

That Escalated Quickly: Goldman Cuts PC Shipment Outlook As Memory Prices Go Parabolic

Well that escalated quickly.

Goldman analysts led by Allen Chang have revised down global PC shipment forecasts for 2026-28, citing a sharp spike in memory prices as data centers worldwide soak up the supply of high-bandwidth memory.

Before diving into Chang's note, here's a quick recap of what's unfolded so far:

• "Entered New Era": SK Hynix To Build $13 Billion Memory Plant As Nvidia CEO Says AI Demand Soaring

• "Market That Never Existed": Nvidia CEO Sparks Frenzy In Memory Stocks

• Soaring Memory Costs Sink Nintendo Shares; Goldman Says Selloff Is Buy-The-Dip Opportunity

• UBS Says Soaring Memory Chip Prices To "Turbo-Charge" Samsung Earnings

• First Victims Of 'Great Memory Crunch' Emerge As Data Centers Soak Up Global Supply

We've followed the historic price spike for months.

Update: two months later https://t.co/Q4TPIrpzxV pic.twitter.com/O3KTKxZOVE

— zerohedge (@zerohedge) December 22, 2025

Amazon price-tracking website CamelCamelCamel shows a parabolic price surge in Crucial Pro DDR5 64GB RAM, rising from $145 to $790 in just six months. Anyone building a gaming PC to power a trading station must be furious, as the greatest memory crunch of our time is now underway and could worsen in the months ahead.

Now, soaring memory prices will undoubtedly pressure consumers to put off a new PC and squeeze margins for device makers. This prompted Chang to revise his desk's estimates for global PC shipments:

We revised down global PC shipment estimates for 2026-28E amid increasing memory price, flattening replacement cycle after Windows 10 End of life, and demand pull-ins into 4Q25. We expect global PC shipments to see -5%/ +3% YoY in 2026E / 27E (vs. +3% / +3% previously), to reach 271m / 281m units.

AI PCs will continue to be the growth drivers. We model AI PC shipments to be 159m / 201m in 2026 / 27E (+53% / +27% YoY), representing 58% / 72% penetration (largely unchanged from 58% / 71% previously). Gaming PCs shipment will reach 28m / 32m in 2026 / 27E (-7% YoY / +11% YoY), in our view, impacted by the rising memory price.

Our updated PC TAM model is based on the latest GS forecasts for key suppliers including Apple, Lenovo, HP, Dell, ASUS, Samsung, Microsoft, LG, Xiaomi and Gigabyte. Details within. We also downgrade Gigabyte to Neutral (from Buy) relative to coverage on softer PC related demand and a fair valuation.

Global PC shipments forecast: 

What's next ...

First, AI came for my RAM
Next, it came for my video card pic.twitter.com/ic09CoO8i6

— zerohedge (@zerohedge) January 21, 2026

A lot more color into Chang's global PCs shipment forecast can be found in the usual place for ZeroHedge Pro Subs.

Tyler Durden Fri, 01/23/2026 - 09:05

Futures Drop As Intel Plunges, Silver Just Under $100

US stock futures are lower with tech stocks lagging as Intel plunged 14% after the chipmaker warned it was struggling with manufacturing problems leading to poor Q1 guidance. As of 8:00am ET, S&P and Nasdaq futures are down 0.1% but off session lows (and well off session highs), paring losses as Nvidia shares gained after Bloomberg reported Chinese officials have told the country’s largest tech firms they can prepare orders for Nvidia’s H200 AI chips. Mag 7 are mixed with NVDA leading gains after Chinese officials were said to have told the country’s largest tech firms, including Alibaba Group Holding Ltd., they can prepare orders for Nvidia Corp.’s H200 AI chips. Bond yields are mostly unchanged; USD is flat. Japan’s top currency official declined to comment on whether the government stepped into the market after USD/JPY plunged over 150 pips in just a few minutes. The pair swiftly bounced and is now around 158.30 having topped 159 during the Bank of Japan press conference after Governor Ueda didn’t offer any clear signal that an early rate hike was possible. The pound sits atop the G-10 FX pile, rising 0.2% against the greenback after PMI topped estimates and hawkish remarks from BOE’s. Commodities are mostly higher led by Oil (+1.5%); both base metals and precious metals are higher with silver trading just under $100/oz. The key macro focus today were global PMIs.

In premarket trading, Magnificent Seven stock are mixed: Nvidia gains 1.5% after Chinese officials were said to have told the country’s largest tech firms, including Alibaba Group Holding Ltd., they can prepare orders for Nvidia Corp.’s H200 AI chips (Tesla -0.1%, Microsoft +0.04%, Amazon +0.1%, Alphabet +0.01%, Apple -0.08%, Meta -0.5%)

• Solar stocks are extending gains after Elon Musk commented on solar-powered satellites in his Davos talk on Thursday. Array Technologies (ARRY) +2%, First Solar (FSLR) +1.4%.
• Booz Allen (BAH) rises 5% after the defense contractor boosted its adjusted earnings per share guidance for the full year, with the new outlook beating the average analyst estimate.
• Capital One Financial Corp. (COF) falls 2% after the bank reported adjusted earnings per share for the fourth quarter that missed the average analyst estimate, driven by higher-than-expected costs. The firm also said it agreed to acquire Brex.
• CSX Corp. (CSX) gains 2% after the freight transportation company provided some guidance for 2026, including low single-digit revenue growth.
• Intel (INTC) plunges 13% after Chief Executive Officer Lip-Bu Tan gave a lackluster forecast and warned that the chipmaker was struggling with manufacturing problems. The stock closed Thursday at the highest level since 2022.
• Intuitive Surgical (ISRG) gains 1.5% after the medical equipment firm reported adjusted earnings per share for the fourth quarter that surpassed estimates. Analysts note that the results were largely in line with the company’s pre-announcement.

In corporate news, Amazon.com is gearing up to ax thousands more corporate employees, ratcheting up efforts to streamline bureaucracy. Apple accused the European Commission of using “political delay tactics” to postpone new app policies as a pretense to investigate and fine the iPhone maker. TikTok and its Chinese parent ByteDance have closed a long-awaited deal to transfer parts of their US operations to American investors, securing the popular video app’s future in the US and avoiding a nationwide ban.

Even with the S&P just shy of all time highs, investors have been quietly trying to sidestep bouts of volatility driven by US policies, highlighted this week by Trump’s push to assert greater control over Greenland. While the outlook for US stocks remains strong, traders are also looking elsewhere for pockets of calm and opportunity.

“I hope that the geopolitical situation starts to ease so that the market can focus on substance versus noise,” said Andrea Gabellone, head of global equities at KBC Global Services. “Full-year 2026 guidances are, in my view, the most crucial piece of data the market has been waiting for quite some time, given valuations and growth expectations.”

Small caps extended a winning streak over large-cap cohorts amid concern about a possible AI bubble and bets that an economic recovery will filter to broader swathes of the economy. The Russell 2000’s outperformance of the S&P 500 in 2026 is the longest such streak in 30 years.  

“Typically, safe bonds and Treasuries have been a source of diversification during times of uncertainty, but particularly Treasuries haven’t provided any cushion over the past days,” said Philipp Lisibach, head of strategy and research at LGT Private Banking. “That’s also why gold continues to rally.”

In Asia, the Bank of Japan maintained its benchmark rate and issued higher inflation forecasts. While Governor Kazuo Ueda suggested that inflation will weaken below 2% soon, he also left open the possibility of an early rate hike. “The challenge is balancing rate hikes to support the yen without slowing growth,” wrote Min Joo Kang, senior economist at ING Bank. “Timing is uncertain, but we now see a June hike as the base case.”

Elsewhere, the US wants to rewrite its defense agreement with Denmark to remove any limits on its military presence in Greenland, people familiar with the matter said. And the Kremlin said the “territorial issue” remains unresolved after Putin held late-night talks with US envoys Steve Witkoff and Jared Kushner about the latest plan to end Russia’s war on Ukraine. Talks continue between US, Russian and Ukrainian representatives in the United Arab Emirates on Friday and Saturday. 

Trump said he has finished interviewing candidates to serve as the next Fed chair and reiterated that he has someone in mind for the job. His shortlist includes National Economic Council Director Kevin Hassett, BlackRock executive Rick Rieder, current Fed Governor Christopher Waller and a former governor, Kevin Warsh. 

The Stoxx 600 falls 0.1%. Telecoms and energy sectors outperform, while travel and consumer product shares lag. The focus fell on the Amsterdam debut of armored vehicle and munitions maker CSG NV. The stock opened 28% higher after the largest-ever initial public offering globally for a pure-play defense firm, highlighting growing appetite for the sector. Here are the biggest movers Friday:

• Ericsson shares surge as much as 12% after the telecom equipment maker reported stronger-than-expected sales in the core networks division, driven by mission-critical projects
• Siemens Energy gains as much as 2.6% to a record high after UBS raised its recommendation to buy from sell and lifted its PT to €175 from €38
• SFS Group shares gain as much as 7.4%, hitting their highest level since May, after analysts said the Swiss tool and component supplier delivered stronger growth than expected in a challenging market
• SSP shares climb as much as 4.1%, the most in a month, after the travel food and beverage outlet operator reported first-quarter results which showed continued positive trading momentum and reassured analysts
• Watches of Switzerland shares rise as much as 6.4% to the highest level since February 2025 after the luxury watch seller acquired Deutsch & Deutsch, a retailer with four showrooms and Rolex distribution in Texas
• Castellum gains as much as 2.6% after Goldman Sachs upgraded its view on the Swedish property firm to buy from neutral in a review of the European real estate sector, where it also upgrades Colonial to neutral from sell
• Babcock International shares drop as much as 3.8% after the support services company said CEO David Lockwood is retiring and will be succeeded by the head of its Nuclear division, Harry Holt
• Edenred shares fall as much as 3.2%, while Pluxee declines as much as 4.7% as UBS downgrades both French-listed meal-voucher stocks, saying the regulatory “tide is turning” against the sector
• C&C Group shares plunge as much as 18%, briefly slumping to their lowest level since 2009, after the alcoholic beverage maker said trading has been worse than expected

Earlier, Asian stocks gained for a second consecutive session, erasing their losses for the week, as fears over tariffs and Greenland faded.
The MSCI Asia Pacific Index gained 0.4% on Friday, with Alibaba, MediaTek and TSMC among the biggest boosts. Korea’s Kospi advanced to a fresh record near the 5,000 level. Stocks also gained in Taiwan, Japan and Hong Kong. The regional gauge is on track to end the week steady after rising for four straight weeks. Investors are shifting focus back to earnings and the outlook for the artificial intelligence trade after US President Donald Trump backed off from putting tariffs on European nations due to tensions over Greenland. Meanwhile, most central banks in the region are cutting rates and economic growth is expected to improve. Equities rose in Tokyo as the yen weakened after the Bank of Japan held interest rates steady as expected. The Straits Times Index rose to a record as Singapore started handing out some of the S$5 billion it plans to invest in local stocks to selected fund managers.

In FX, Japan’s top currency official declined to comment on whether the government stepped into the market after USD/JPY plunged over 150 pips in just a few minutes. The pair swiftly bounced and is now around 158.30 having topped 159 during the Bank of Japan press conference after Governor Ueda didn’t offer any clear signal that an early rate hike was possible. The pound sits atop the G-10 FX pile, rising 0.2% against the greenback after PMI topped estimates and hawkish remarks from BOE’s Greene that also weighed on shorter-dated gilts.

In rates, the yield on 10-year US Treasuries hovered near the highest since September, holding small gains with long-end yields about 2bp richer on the day, flattening the curve. European bonds underperform following UK retail sales and European PMI gauges. US stock futures little changed while crude oil is up nearly 2%.US yields are 1bp-2bp richer across the curve with 2s10s and 5s30s spreads flatter by about 1bp; 10-year near 4.23% is 1.7bp lower on the day with German counterpart little changed and UK cheaper by about 1bp. Focal points of US session include S&P Global US PMIs and University of Michigan sentiment gauge, as well as next week’s supply — both corporate and Treasury coupon auctions scheduled to start Monday. 

In commodities, spot silver rises 2.5% while gold erased an earlier gain to trade lower. Silver rose just shy of $100 and will likely surpass the key level today...

... as the Shanghai silver premium jumped 50% overnight to a record 12.

Precious metals are expected to remain in demand should investors continue to diversify away from US assets in response to erratic US policy and heightened geopolitical risk.Renewed concern about the possibility of US military action against Iran is spurring oil prices. WTI crude futures rise 1.7% to near $60.40; and Brent is at $65 in New York.  

Today's economic calendar includes January preliminary S&P Global US PMIs (9:45am), November Leading Index, January final University of Michigan sentiment (10am) and Kansas City Fed services activity (11am). Friday is slower for company earnings, with SLB slated to report before the market opens.  Capital One’s fourth-quarter revenues came in slightly higher than expected, but EPS missed, and the bank agreed to buy Brex, a fintech company focused on corporate expense management and accounting, for  $5.15 billion.Next week is the busiest of this earnings season, when companies speaking for more than a third of the S&P 500’s total market value will report.

Market Snapshot

• S&P 500 mini -0.1%
• Nasdaq 100 mini -0.1%
• Russell 2000 mini -0.2%
• Stoxx Europe 600 -0.3%
• DAX -0.2%
• CAC 40 -0.5%
• 10-year Treasury yield -1 basis point at 4.24%
• VIX +0.5 points at 16.16
• Bloomberg Dollar Index little changed at 1201.56, euro -0.2% at $1.1735
• WTI crude +1.4% at $60.2/barrel

Top Overnight News

• Russia said it will hold security talks with the U.S. and Ukraine in Abu Dhabi on Friday, but warned after a late-night meeting between President Vladimir Putin and three U.S. envoys that a durable peace would not be possible unless territorial issues were resolved. RTRS
• The US wants to rewrite its defense agreement with Denmark to remove any limits on its military presence in Greenland, people familiar said. It currently says the US must “consult with and inform” the two. Donald Trump also mused on social media about invoking NATO’s collective defense clause to protect the US’s southern border. BBG
• Trump on Thursday said he does not like the idea of letting people use 401(k) retirement funds for a down payment on a house, even though it was floated by his own chief economic adviser, Kevin Hassett. RTRS
• Trump thanks Chinese President Xi for working with the US and ultimately approving the TikTok deal, adds that Xi could have gone the other way.
• Treasury Secretary Scott Bessent said in an interview Thursday that the U.S. relationship with China has reached a “very good equilibrium” where disagreements are less likely to turn into full-scale economic conflict as they did last year. Politico
• Chinese officials have told the country’s largest tech firms they can prepare orders for Nvidia’s H200 AI chips, people familiar said, suggesting Beijing is close to formally approving imports. Nvidia shares jumped (NVDA +128 bps premkt). BBG
• BOJ keeps key policy rate steady at 0.75% as widely expected. The BOJ retained its hawkish inflation forecasts on Friday and stressed it will remain vigilant to price risks from a weak yen, signaling that policymakers intend to keep raising still-low borrowing costs in a politically charged atmosphere. RTRS
• China could set this year’s GDP target at 4.5-5% (vs. “about 5%” in the last three years), signaling a tolerance for modest growth deceleration as it works toward rebalancing the economy. SCMP
• Eurozone flash PMIs for Jan are mixed, with a shortfall in services (51.9 vs. the Street 52.6) and modestly better manufacturing (49.4 vs. the Street 49.2), and the details were mixed too (new orders rose, although employment deteriorated while inflation intensified vs. Dec). S&P Global
• The US urged grid operators to tap backup power, including from data centers, as a record winter storm threatens blackouts nationwide. Texas is under particular stress, while airlines brace for disruption. BBG
• US House passes package of FY26 funding bills in a major step towards averting government shutdown on Jan 31st; sending to Senate for final votes.
• US House Speaker Johnson said there is no GOP consensus on whether to use tariff revenue to send $2k checks out.

Trade/Tariffs

• EU official said India and EU will announce a free trade agreement as soon as next week.
• EU Official announces that the India-EU FTA will lead to substantially lower tariffs.
• The Trump administration pushed out 2 key officials focused on countering technological threats from China, the WSJ reported citing sources; this has raised concerns among US security hawks about the softer stance towards China.
• Spanish PM Sanchez said the US is provoking tension in the Transatlantic, EU have the instruments to respond proportionally to coercion.
• The EU is moving to revive its US trade deal after President Trump backed away from his tariff threat tied to Greenland.
• US President Trump said the people who brought the tariff legislation against the US are strongly China-oriented; the US is going so well, giant growth and investment with almost no inflation.

BOJ

• BoJ maintains its short-term interest rate at 0.75%, as expected; 8-1 vote split with Takata voting for a 25bps hike.
• BoJ Governor Ueda (post-policy presser) said headline inflation soon to undershoot 2%; not yet at the stage to mull if goal achievement is coming earlier. Will conduct monetary policy in such a way as to ensure they do not fall behind the curve. Will keep raising rates if the economic outlook is realized. It will take a while before the full impact of tightening is seen across the economy, conditions remain accommodative after the December move. Will conduct nimble market operations to respond to irregular moves; will work closely with the government on long-term rates. Operations could be conducted to encourage stable yield formation. Must pay attention to even small FX moves as underlying inflation approaches 2%.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded entirely in the green, though without a clear sector-led driver, as regional sentiment stayed broadly constructive. ASX 200 posted modest gains, supported by strength in mining and metals as gold, silver and platinum extended their bid. A strong PMI print — with both manufacturing and services pushing further into expansion — added to the positive tone. Nikkei 225 gapped higher at the open but later pared part of its advance, pressured by chip stocks after weak Intel earnings. Offsetting some of the drag, videogame names outperformed, with Nintendo (+5%) boosted by strong US Switch 2 sales data. Following the BoJ rate decision, the Nikkei was unreactive as rates remained unchanged. Hang Seng and Shanghai Comp opened higher, with the Hang Seng outperforming after Alibaba (+3.6%) was reported to be preparing the listing of its chipmaking arm. Metals strength following fresh records in gold and silver also supported both indices.

Top Asian News

• Chinese President Xi had a phone call with Brazilian President Lula, Xinhua reported. China is willing to cooperate with Brazil in different areas.

European bourses are trading largely on the backfoot, in contrast to the broadly positive action seen overnight. European sectors are trading mostly in the red. Leading sectors are Telecommunications (+1.1%), Energy (+1.2%) and Healthcare (+0.4%). Telecommunication has been given a boost by Ericsson (+8.3%) after the Co. reported strong Q4 earnings, whilst stronger crude prices has underpinned the Energy sector. On the flip side, Construction (-0.9%), Travel (-1.0%) and Financial Services (-0.5%) lag - no fresh newsflow driving the move.

Top European News

• Germany's core budget had borrowing of EUR 66.9bln instead of the allocated EUR 81.8bln, according to sources. Sources also reported that total investment hits record level of EUR 86.8bln in 2025.
• French parliament finds confidence in PM Lecornu (i.e. the no-confidence motion failed); another motion to follow shortly.

FX

• DXY is incrementally firmer this morning and trades within a 98.25-98.48 range, which is towards the lower end of the prior day’s confines. Newsflow for the index is lacking this morning, with all attention on the upcoming trilateral meeting between US-Russia-Ukraine; Trump reminded that “anytime we meet, it is good".
• JPY currently the top G10 performer this morning. Earlier, the BoJ kept rates steady (subject to dissent) and upwardly revised their 2026 inflation forecasts – spurring upside in the JPY at the time, but gradually waned into the Ueda meeting. The Governor avoided any overt hike signal, but noted that they are wary of a “rapid” rise in yields, also adding that they "must pay attention to even small FX moves" (strengthening JPY).
• Thereafter, a significant bout of pressure was seen in USD/JPY, soon after Ueda concluded its presser. In more detail, USD/JPY fell from 159.10 to 157.32 in an immediate reaction, before gradually scaling back to around 158.00 mark where the pair currently resides. Some had touted intervention, though Bloomberg's Cudmore suggested the move is a rate check (i.e. the MOF calling round to see where banks think the JPY should be). In response, Finance Minister Katayama declined to comment if they intervened in the FX market, instead reiterating that they are watching FX moves with a high sense of urgency.
• G10s are mixed against the Dollar. GBP is towards the top of the pile, with upside facilitated by a hotter-than-expected Retail Sales report (which also included upward revisions to the prior); PMI figures this morning also paint a positive activity picture in the region. Thereafter, Cable took another leg higher to a session peak of 1.3532 after BoE’s Greene said, “forward indicators for wage growth are even more concerning than inflation expectations”, with other commentary generally striking a typical hawkish tone.
• Elsewhere, EUR is mildly lower; earlier slipped to session lows on the subdued French PMI metrics (Services surprisingly contracted), but then jumped on the upbeat German figures.

Fixed Income

• JGBs are lower by c. 40 ticks at the moment, with downside of just under 50 at most at a 131.32 session low. Action that comes after the BoJ and Ueda's presser where, in short, the narrative is that April is the earliest point for a hike, as Ueda specifically referenced seeing price behaviour for that period as a "factor to mull a hike". Though, JGBs remain markedly clear of their WTD 130.66 trough and by extension yields are off WTD highs. Nonetheless, the week's action, driven by fiscal commentary and the BoJ, has sparked a modest shift in market pricing; with 21bps of tightening currently implied by June vs c. 18bps last week; for April, its 14bps currently vs 11bps last week.
• USTs a tick or two higher in a very thin 111-19 to 112-23 band, awaiting the trilateral summit re. Ukraine (timing TBC), flash PMIs and the potentially imminent Fed Chair announcement.
• Bunds, in contrast, are a tick or two lower. But, also in a narrow 127.64-84 band. Modest two-way action on but no real move to the January Flash PMIs, as political uncertainty re. France and the latest geopolitical/tariff gyrations potentially making some of the responses redundant.
• OATs are broadly in-line with core benchmarks. Towards the mid-point of 121.10 to 121.27 parameters. Earlier, the French parliament found confidence in PM Lecornu (as expected), though he is still subject to another no-confidence motion. Into this, the OAT-Bund 10yr yield spread has widened a touch, out to 63bps, but within comfortable and familiar territory.
• Gilts outperform. Gains of 32 ticks at best to a 91.68 high, currently holding around 10 ticks off that. Upside despite the strong December Retail Sales release and upward revisions to the November Y/Y components. Data that appears to have been overshadowed by a reassessment of the political risk after Thursday's Burnham-induced sell-off; as more commentators pick up on the detail that Burnham's path to becoming an MP is tricky, and largely dependent on the pro-Starmer Labour NEC.
• However, the move for Gilts unwound after strong UK PMIs and hawkish commentary from BoE's Greene, points that were enough to take the benchmark to near enough flat on the day.

Commodities

• In short, the commodity space awaits the trilateral summit between Ukraine, Russia and the US today and potentially into tomorrow. Timing and details around the meeting are currently light, though we do know the attendees. From Ukraine, Umerrov, Budanov, Arakhamia and Hnatov. From Russia, Kostyukov; note, Dmitriev is also in the UAE, unclear if he will partake. From the US, Witkoff and Kushner.
• Crude is firmer by just under a USD a barrel. Towards highs of USD 60.22/bbl and USD 64.93/bbl for WTI and Brent, respectively. Upside that is more a consolidation from the downside seen on Thursday than a fundamentally-driven move higher.
• XAU pulled back in the early European morning. A move that, interestingly, occurred alongside downside in US equity futures at the time. As such, the move is perhaps profit-taking from recent gains; we also note similar action in silver at the time, though XAG remains firmer on the day. Spot gold briefly broke below USD 4.9k/oz, after hitting USD 4967/oz overnight.
• Base metals feature gains in 3M LME Copper. Upside that seemingly occurred alongside strength in China overnight. At best 3M LME to USD 12.97k/T. Note, Shanghai Futures Exchange is to adjust price limits and margin ratios for nickel, aluminium, lead, zinc, and stainless-steel futures as of the 27th January settlement.
• China’s Shanghai Futures Exchange will adjust price limits and margin ratios for nickel, aluminium, lead, zinc, and stainless-steel futures following the 27th of January closing settlement.
• China is reportedly set to offer CNY-denominated liquefied natural gas futures contracts as early as February, according to sources.
• Goldman Sachs lowers its Summer'26 Henry Hub forecast to USD 3.75/MMBtu (prev. USD 4.50/MMBtu), maintains 2027 forecast at USD 3.80/MMBtu.
• US President Trump said Venezuelan oil will be divided up.

Geopolitics: Ukraine

• Russia's Kremlin said discussions in Abu Dhabi will happen today and will continue tomorrow if necessary. Russia's sovereign assets frozen in the US amount to a little less than USD 5bln. Not looking to go into details on the "Anchorage Formula" for peace agreement with Ukraine.
• Ukrainian President Zelensky said he discussed with US President Trump additional air defence missiles, and provisions for PAC-3 & anti-ballistic missiles.
• Ukraine President Zelensky said he is waiting for US President Trump, a date, and a place for the signing of security guarantees.
• Russia's Kremlin said Greenland proposal and Board of Peace were discussed with US envoys; talks were constructive. Without solving the territorial issue, there is no prospect of long-term settlement in Ukraine.
• Russian envoy Dmitriev called the meeting between President Putin and US envoys important.
• Russia's Kremlin said the talks between President Putin and US envoys have concluded.
• US President Trump said Russian President Putin, alongside others, will have to make concessions to end the war in Ukraine. Putin and Zelensky want to make a deal. Ukraine war doesn't affect the US, it affects Europe.
• EU Commission President von der Leyen said Europe will continue to work on Arctic security, step up investments in Greenland and Arctic-ready equipment and deepen cooperation with partners in the region. Well-prepared with measures if tariffs are applied. Europe should use defence spending 'surge' on Arctic-ready equipment. Close to prosperity deal with the US and Ukraine.
• US President Trump said the US will work with NATO on Greenland security; there are good things for Europe within the framework. On the trilateral meeting with Ukraine and Russia, said "anytime we meet, it is good". There will be something on Greenland in 2 weeks.
• Russian defence ministry reported strategic bomber patrols conducted over Baltic Sea.

Geopolitics: Middle East

• Israeli officials reportedly express concern that they could be targeted in retaliation by Iran in response to a US strike, FT reported citing sources.
• US President Trump, on Iran, said they have a big force going towards Iran; watching Iran very closely and would rather not see something happen on Iran; will be doing a 25% secondary tariff on Iran.

Geopolitics: Others

• US President Trump posted that the Board of Peace withdraws its offer for Canada to join.
• US President Trump posted "Maybe we should have put NATO to the test: Invoked Article 5, and forced NATO to come here and protect our Southern Border from further Invasions of Illegal Immigrants".
• US House narrowly rejects resolution to limit President Trump's war powers in Venezuela.
• US President Trump said Chinese President Xi will come to the US towards the end of the year.
• NATO's Rutte and Denmark's PM is to meet on Friday morning.
• Russian defence ministry reported strategic bomber patrols conducted over Baltic Sea.

US Event Calendar

• 9:45 am: United States Jan P S&P Global US Manufacturing PMI, est. 52, prior 51.8
• 9:45 am: United States Jan P S&P Global US Services PMI, est. 52.9, prior 52.5
• 9:45 am: United States Jan P S&P Global US Composite PMI, est. 53, prior 52.7
• 10:00 am: United States Nov Leading Index, est. -0.2%
• 10:00 am: United States Jan F U. of Mich. Sentiment, est. 54, prior 54

DB's Jim Reid concludes the overnight wrap

The market recovery continued yesterday, as easing geopolitical risks and a strong batch of US data led to growing optimism on the near-term outlook. That meant the S&P 500 (+0.55%) rose for a second day running, moving back within 1% of its record high. And for some assets, it was almost like the selloff never happened, with the VIX index of volatility (-1.26pts) back at 15.64pts, which is beneath its levels prior to Saturday’s tariff announcements, whilst US HY spreads (-4bps) closed at their tightest level since 2007, at 250bps. So it was a strong day for the most part, and the risk-on tone also sent 2yr Treasury yields (+2.4bps) to a 6-week high of 3.61%. Nevertheless, there’s still a lot of focus on the precise details of what the framework over Greenland will include, and there was lingering caution that the geopolitical risk hasn’t entirely gone away. So gold prices (+2.16%) kept up their recent momentum, rising to $4,936/oz by yesterday’s close, and they’ve posted a further gain up to $4,966/oz this morning.

In terms of the Greenland situation, there weren’t any explicit updates yesterday, but multiple press outlets reported that the talks between President Trump and NATO Secretary General Mark Rutte had focused on reopening the 1951 agreement between the US and Denmark over Greenland’s defence. Bloomberg reported that it would involve the stationing of US missiles, with the US seeking to remove any limits on its military presence in Greenland, whilst Trump himself said in an interview on Fox Business that “essentially, it’s total access.” Trump was also asked if the US would acquire Greenland, and he said “It’s possible. But in the meantime, we’re getting everything we wanted, total security.” Meanwhile, after the de-escalation the previous day, there were limited news from a summit of EU leaders, with Commission President von der Leyen saying the bloc would engage with the US in a “firm but non-escalatory” manner.

With fears ebbing about a military or economic escalation, this was very positive for global risk assets yesterday. Moreover, European markets did particularly well, because they finally reacted to Wednesday evening’s news that Trump wouldn’t impose 10% tariffs for several countries on Feb 1. Indeed, that reaction saw the STOXX 600 (+1.03%) post its best day in over two months, and there was a clear response among assets more sensitive to a military or trade escalation. So defence stocks struggled as a military escalation was viewed as less likely, and Rheinmetall (-3.40%) was the worst performer in the German DAX. Conversely, there was an outperformance from sectors like automakers that would have been more affected by tariffs, and Volkswagen (+6.51%) was the top performer in the DAX.

Whilst the geopolitical news was the main driver of the rally yesterday, sentiment also got a boost from a strong batch of US data, which cemented confidence in the near-term outlook. Most notably, the weekly initial jobless claims were at just 200k in the week ending January 17 (vs. 209k expected), which in turn pushed the 4-week moving average to a 2-year low of just 201.5k. In addition, the Q3 GDP print was also revised up a tenth, now showing growth at an annualised +4.4% before the government shutdown began. And the PCE inflation data for October and November was in line with expectations, with both headline and core PCE running at +0.2% for both months.

That data boosted confidence in the near-term outlook, and it meant that investors continued to dial back their expectations for rate cuts this year. Indeed, just 43bps of Fed cuts are now priced by the December meeting, the fewest so far this year and down -2.6bps on the day. So in turn, that helped to push up Treasury yields higher, especially at the frontend, with the 2yr Treasury yield (+2.4bps) up to 3.61%, whilst the 10yr yield (+0.6bps) reached 4.25%. That risk-on tone was echoed among US equities too, with the S&P 500 (+0.55%) powered by a strong advance for the Magnificent 7 (+2.11%), which posted its biggest gain of 2026 so far.

Overnight, the Japanese yield curve has flattened after the Bank of Japan delivered a somewhat hawkish-leaning decision. They left their policy rate at 0.75% as expected, after hiking at the previous meeting. However, it was an 8-1 vote, with a dissent in favour of another 25bp hike, whilst the outlook report raised their inflation outlook as well. So the median expectation for core-core CPI has risen by two-tenths to +3.0% in fiscal 2025, whilst the fiscal 2026 forecast is also up two-tenths to +2.2%, with fiscal 2027 up a tenth to +2.1%. And looking forward, the outlook report reiterated their desire to keep hiking rates, saying that “real interest rates are at significantly low levels”, and that if the forecast were realised then they would “continue to raise the policy interest rate”. In turn, that’s seen the 2yr Japanese yield (+3.1bps) reach a post-1996 high of 1.23%, but the 30yr yield (-1.9bps) is down to 3.62%. We also had the December CPI report shortly beforehand, which showed headline CPI decelerating to +2.1% (vs. +2.2% expected) due the impact of government subsidies.

Otherwise in Asia, equity markets have generally moved higher for the most part, which comes as the flash PMIs have painted a resilient picture of global economic activity as we begin 2026. So Japan’s composite PMI moved up to a 17-month high of 52.8, Australia’s hit a 5-month high of 55.5, whilst India’s moved up to 59.5. So that backdrop has seen further gains for the Nikkei (+0.16%), the Shanghai Comp (+0.28%) and the Hang Seng (+0.47%), whilst South Korea’s KOSPI (+0.47%) is on track for another record high. Meanwhile, US equity futures are also positive, with those on the S&P 500 (+0.19%) pointing towards further gains. However, the CSI 300 (-0.45%) has lost ground, and we also found out overnight that the People’s Bank of China set the daily reference rate for the yuan at 6.9929 per dollar, which is the first time since 2023 that the reference rate has been below 7.

Elsewhere, we’ve seen fresh records for commodities, with gold (+2.16%) closing at another record of $4,936/oz yesterday, and overnight it’s reached an intraday peak of $4,967/oz. So it’s in touching distance of the $5,000 level, and bear in mind it was only in October that it crossed the $4,000 level. Similarly, silver (+3.42%) closed at a new record of $96.24/oz yesterday, and overnight it’s also hit an intraday record of $99.36/oz. Otherwise, Brent crude fell -1.81% to $64.06/bbl, following positive comments on peace talks from Ukraine’s President Zelenskiy after meeting Trump in Davos, as well as the news that exports of Kazakh oil via a Black Sea oil terminal in Russia should soon recover from recent disruption caused by Ukrainian drone strikes. Further talks between US, Ukraine and Russia officials are expected in Abu Dhabi today and tomorrow.

Earlier in Europe, UK gilts underperformed their European counterparts yesterday, with the 10yr yield up +1.7bps on the day to 4.47%. That came in response to the news that Greater Manchester Mayor Andy Burnham could have a path back into Parliament, as a vacancy opened up to become MP in the Greater Manchester seat of Gorton and Denton. Gilts reacted to that because Burnham is seen as a plausible challenger against PM Keir Starmer, whose position has come under increasing pressure over the last year, and Burnham has previously said that the UK is “in hock to the bond markets” and called for higher public borrowing. It’s unclear yet if Burnham would be a candidate in that by-election, but gilt markets have been closely following political developments, as we saw last July when there was a big selloff driven by speculation about Chancellor Reeves’ position and whether the fiscal rules might be loosened under a new chancellor.

Finally yesterday, we also had the minutes from the ECB’s last meeting in December, where they kept their deposit rate at 2%. They showed that the ECB wanted to keep their options open, saying that “it was important for the Governing Council to maintain full optionality in either direction for future meetings”. Looking forward, it also said that “the softening of downside risks since September meant that maintaining interest rates at their current level represented a fairly solid path under the baseline outlook”. Against that backdrop, yields on 10yr bunds (+0.5bps) rose by a small amount, and those on 10yr OATs (-2.8bps) and BTPs (-1.6bps) fell back.

Looking at the day ahead, data releases include the January flash PMIs from the US and Europe, the University of Michigan’s final consumer sentiment index for January, and UK retail sales for December. Otherwise from central banks, we’ll hear from ECB President Lagarde and the BoE’s Greene.

Tyler Durden Fri, 01/23/2026 - 08:38

Real gross domestic product (GDP) increased in all 50 states and the District of Columbia in the third quarter of 2025. State-level changes ranged from a 6.5 percent increase in Kansas to a 0.4 percent increase in North Dakota. Personal income increased in all 50 states and the District of Columbia in the third quarter of 2025. State-level changes ranged from a 6.3 percent increase in Kansas to a 0.1 percent increase in Louisiana. Full Text

The post Spending Under Trump: Drugs Up, Factories Down appeared first on CEPR.

What GAO Found GAO found (1) the Federal Housing Finance Agency's (FHFA) financial statements as of and for the fiscal year ended September 30, 2025, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles; (2) although internal controls could be improved, FHFA maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025; and (3) no reportable noncompliance for fiscal year 2025 with provisions of applicable laws, regulations, contracts, and grant agreements GAO tested. In its written comments on a draft of this report, FHFA stated that it is pleased to accept GAO's unmodified opinion on its financial statements and maintains its commitment to strong internal controls and reliable financial reporting. Why GAO Did This Study The Housing and Economic Recovery Act of 2008 established FHFA as an independent agency empowered with supervisory and regulatory oversight of the housing-related government-sponsored enterprises: the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the 11 Federal Home Loan Banks, and the Office of Finance. This act requires FHFA to prepare financial statements annually and requires GAO to audit the agency's financial statements. In accordance with the act, GAO audited FHFA's financial statements. For more information, contact Anne Sit-Williams at sitwilliamsa@gao.gov.

NatGas "Tightening Shock" Sparks Historic Weekly Rally As Major Winter Storm Imminent

US natural gas futures surged as much as 75% over the past week, well above $5/mmBtu, driven by sharply colder weather forecasts (comparable to the 2021 Uri storm that paralyzed Texas' power grid), ongoing production freeze-offs, and a vicious market trap for bears that unleashed epic short covering.

As of Friday morning, around 0645 ET, front-month NatGas contracts in New York fell 1.4% to $4.97/mmBtu, after surging 63% over the last three trading sessions.

Prices were still on track for the biggest weekly gain on record, with Bloomberg data going back to 1990.

This week's surge was largely fueled by below-average temperature forecasts across the Lower 48, combined with the threat of a potentially historic winter storm stretching from Texas to the Northeast.

Widespread winter activity across more than half the country has raised freeze-off risks, particularly in southern gas-producing states and Appalachia, while also stoking concerns about pipeline icing that could reduce volumes and pressure power grids this weekend and into next week.

Winter is Coming for Appalachia
This week's Appalachian nat gas production is already down 1.1 Bcf/d versus last week, and the extreme cold is just getting started.

Pittsburgh overnight lows are headed to -6.8°F at their most intense levels next week, with this cold coming in… pic.twitter.com/l2oyl80cfe

— Criterion Research (@PipelineFlows) January 22, 2026

Our reporting this week:

• Appalachian NatGas Output Faces "Intense Losses" As Arctic Blast Drives Power Grid Risk Higher

• NatGas Jumps 75% As Extreme Cold, Blizzard Risks Threaten Appalachian Gas Supply

Samantha Dart, lead analyst on the Goldman Sachs commodities team, provided clients with critical color on the US NatGas market Thursday evening following a historic week of upside price action.

Dart was clear that the move in NatGas was purely weather-driven: prices surged amid sharply colder forecasts, production freeze-offs, and short covering. She said her desk views the spike as a near-term shock, with futures prices likely overshooting fundamentals rather than signaling a sustained rally.

She said that front of the curve rallied more than Summer 2026 (Sum26) contracts, highlighting two key risks:

• Production outages might hit exactly when heating demand peaks and the system might fall temporarily short on gas

• Storage path risks: Higher heating demand ultimately lowers overall storage levels, increasing the market's vulnerability to tightening shocks during the 2026-27 winter.

Dart continued:

• We estimate that near-term deliverability risks are meaningful, even taking into account mitigating factors like gas-to-coal switching and the re-sale of gas by liquefaction facilities back to the grid. That said, we think this would ultimately be a temporary physical imbalance, likely to be reflected in very high cash prices during the tightening shock, rather than in a sustained rally in NYMEX gas. We think this is especially the case given the potential for strong Northeast production to help rebuild Gulf storage levels in the spring, as observed last year. As a result, while weather forecast shifts can keep price volatility elevated, prompt NYMEX prices seem to have overshot fundamentals.

She added that the upcoming storm (peak cold on Jan 26) is expected to create a temporary tightening, reflected in higher cash prices than NYMEX futures, similar to the 2021 Uri event, when cash spiked to $25/mmBtu while prompt NYMEX stayed flat.

Dart's view is that prices post-storm and post-winter blast will return to the medium-term target, but stay above $3.50, and not exceed $4.

The full note can be found in the usual place for ZeroHedge Pro Subs.

Tyler Durden Fri, 01/23/2026 - 07:20

What GAO Found Telework use decreased following the end of the COVID-19 pandemic emergency and the President’s January 2025 Return to In-Person Work memorandum among three federal agencies GAO reviewed: the Department of the Interior’s Bureau of Indian Affairs (BIA), the Social Security Administration (SSA), and the Department of State’s Bureau of Consular Affairs (CA). Officials at all three agencies told us telework likely had some effect on operations. For instance, SSA and CA had staff who had left or considered leaving for other organizations with more telework availability. They told us that other factors, such as a lack of qualified applicants and increased workloads, led to recruiting challenges. Officials at SSA told us telework was an important recruitment tool. GAO found, however, that SSA is at risk of skills gaps in key occupations, in part because its employees are seeking greater telework flexibility elsewhere. These risks come at a time when SSA is seeking to substantially reduce the size of its workforce. GAO previously reported that it is critical for agencies to carefully consider how to strategically downsize their workforces and maintain the staff resources to carry out their missions before implementing workforce reduction strategies (GAO-18-427). Agency officials said SSA has a human capital plan it can update to help guide staffing decisions, but has not done so because they are focused on responding to administration workforce priorities such as implementing skills-based hiring. However, without developing or updating a human capital plan, SSA may lack the information needed to ensure it has the mission-critical staff necessary to provide timely public service. Officials at all three agencies also told us factors other than telework contributed to problems in providing key customer services at times during fiscal years 2019 through 2024. For example, BIA attributed delays in providing probate services to Tribes and their citizens to factors such as staffing shortages and funding issues. SSA officials cited a learning curve related to a new disability case processing system and a substantial increase in the volume of submitted medical evidence as contributors to delays in processing disability claims. CA reported an unexpectedly large volume of applications and high rates of attrition that contributed to substantial delays in 2023 passport processing. However, none of the agencies had evaluated their telework programs to determine their effects on its performance and identify problems, a key practice for successful telework programs. Officials said they had not done so because they were unsure how to or were not required to conduct such evaluations. GAO determined that it was not practical for BIA and CA to evaluate their telework programs now because their staff can no longer use regular telework. Since some of SSA’s program offices continue to regularly use telework, it remains important for the agency to evaluate its telework program to identify any problems or issues and make appropriate adjustments. Why GAO Did This Study Federal agencies have used telework to help accomplish their missions, maintain continuity of operations during emergencies, and recruit and retain employees. GAO was asked to review telework use at BIA, SSA, and CA. This report (1) summarizes how often the agencies’ staff teleworked from July 2019 through May 2025, and how the agencies’ telework programs changed following the President’s issuance of the Return to In-Person Work memorandum in January 2025; (2) describes the effects telework’s use had on the agencies’ operations and customer service; and (3) assesses the extent to which the agencies followed selected key practices for successful telework programs. For this report, GAO collected and analyzed the agencies’ telework data from July 2019 through May 2025. GAO reviewed and summarized agencies’ plans to change telework use before and after January 2025. GAO analyzed agency performance information, and compared agencies’ activities with selected key telework practices identified in GAO-21-238T. GAO also conducted interviews and 11 discussion groups with agency staff.

Japan Left Waiting As $7.2BN US Arms Deliveries Stall, Ukraine Prioritized

After nearly four years of the Russia-Ukraine war, and the US having throughout poured billions into Kiev's military and civic services sector, there are signs that other American allies are experiencing extreme delays in pre-scheduled arms shipments because Washington's priorities are clearly elsewhere.

Israel over the past couple years has also been a high priority, amid its war in Gaza, which resulted in the US fast-tracking some bombs, ammo, and weapons deliveries. But countries like Japan are suffering from extreme delays, at a sensitive moment it is locked in an ongoing diplomatic standoff with China over the Japanese Prime Minister's Taiwan stance.

E-2D Hawkeye airborne warning and control aircraft, via US Navy.

Nikkei has referenced a Japanese government internal investigation which found that "118 orders for U.S. military equipment worth 1.14 trillion yen ($7.21 billion) have not been delivered at least five years after the contracts were signed, in some cases forcing the Self-Defense Forces to use older equipment."

These startling figures were uncovered by Japan's Board of Audit, and revealed upon completing its formal investigation last Friday.

"The 118 cases pointed out by the Board of Audit include equipment that Japan added to its orders later, and not all of them are delayed deliveries," the Japan's Defense Ministry said, adding that "we will address each of the issues in Foreign Military Sales procurement one by one."

However, the Japanese government has not speculated as to specific causes or made any accusations of its key arms partner in the West. The Nikkei report, for example cites instances of problems at manufacturing companies, resulting in serious delays of advanced weaponry.

But the report does bring up the question of Washington's shifting priorities, which can come into play even long after deals with Tokyo are inked:

Even with FMS contracts, deliveries can be delayed if the U.S. side lacks the items in stock. Shipments to Japan can be postponed when Washington determines that delivering equipment would disrupt American military operations.

Japanese opposition parties had expressed concern that deliveries of air defense missiles and other equipment could be delayed due to the impact of Russia's invasion of Ukraine. The government said it was difficult to comment on such a possibility.

Examples of major military hardware delayed for the island-nation include E-2D early warning and control aircraft. Much of what Japan seeks is indeed defensive in nature, also as it knows it would have to rely heavily on its American ally if some kind of hot conflict were to ever kick off with China.

China has earlier warned Japan will suffer a "crushing" defeat if it ever decided to directly intervene in the Taiwan dispute. Recent years have also seen Beijing's anger grow after NATO briefly talked about opening an official office in Tokyo, but these plans were soon abandoned.

Tyler Durden Fri, 01/23/2026 - 06:55