Derek Decloet and Layan Odeh of Bloomberg report the US dollar has lost its shine and that's a problem for pension funds:

Treasury Secretary Scott Bessent stepped in to stop the slide in his country’s currency, telling CNBC earlier today: “The US has always had a strong dollar policy.” The Bloomberg Dollar Spot Index rose for the first time in a week.

An exception to the greenback’s rally was the loonie, which stayed strong after the Bank of Canada and Federal Reserve both opted to hold rates steady. The Canadian dollar is now at its highest level against the buck since October 2024, which is nice for cross-border shoppers and vacationers — though there are fewer of them these days.

A stronger currency is a complicating factor in the Canadian economy. Some export-driven manufacturers prefer a softer loonie. Among other things, it can help cushion the blow of tariffs. Canadian pension funds, stuffed to the rafters with US-dollar assets, also have some decisions to make on how to hedge their currency and political risks. 

As it happens, Investment Management Corp. of Ontario, a big manager of government pensions and other cash, published its annual world outlook report today. Currency risks are a feature of the new environment of trade wars and geopolitical threats, IMCO said, and investors might do well to explore the Swiss franc and Japanese yen (and gold, of course) as places to diversify.

“Investors may need to contemplate what a rebalanced global economy — where the US plays a different role — means for their portfolios,” IMCO Chief Strategist Nick Chamie said. “This includes rebalancing exposures away from the US to take advantage of increasing opportunities elsewhere.”

On Wednesday, IMCO released its World View 2026:

Positioning portfolios for resilience as globalization fractures and volatility rises

TORONTO (January 28, 2026) – The Investment Management Corporation of Ontario ("IMCO") today releases the IMCO World View 2026, its annual flagship research publication that helps guide long-term investment strategy across its multi-billion-dollar portfolio.

This year's report underscores the speed at which deglobalization is happening, driven by a rise in protectionist policies and tariffs, led primarily by the U.S., while governments around the world seek to reassert economic control. IMCO's Investment Research and Economics team expects the pace of this transition to amplify market volatility and materially influence long-term portfolio construction.

The report distills complex economic, market, and policy developments into six core themes and six corresponding investment implications, offering a framework to navigate a more polarized and unpredictable global economy.

"Our World View framework cuts through global economic and market complexity as a cornerstone of IMCO's research-driven investment process," said Nick Chamie, Senior Managing Director, Head of Total Portfolio and Capital Markets and Chief Strategist of IMCO.

Highlights from the IMCO World View 2026:

Accelerating trends:

• Deglobalization: President Donald Trump's second term has intensified Washington’s interventionist and competitive approach, quickening the global shift away from open, integrated markets as countries recalibrate their economic models.
• Policy inflection: U.S. policymakers are increasingly turning to policy intervention to reshape global trade and financial flows, using tools ranging from fiscal stimulus and tariffs to currency measures, subsidies, and other novel approaches.

Steady trends:

• Addressing inequality: Governments have shifted some attention away from this social concern, focusing instead on boosting economic growth through industrial and fiscal stimulus, though inequality remains persistent and politically consequential.
• Disruptive technologies: Rapid adoption of artificial intelligence and advances in electric vehicle batteries highlight their growing impact across various industries.
• Evolving market structures: While growth moderates in private markets, the investable universe is shifting, expanding retail investor access to previously exclusive private markets.

Decelerating trends:

• Climate change and sustainability: Rising energy demand and security concerns have temporarily shifted focus away from environmental priorities, though the need for clean energy adaptation amid the energy transition remains.

Key implications for investors:

• End of low for long: Geopolitical uncertainty and economic reshoring may fuel inflation and shape monetary policy, making broader currency diversification, shorter duration fixed-income and safe-haven assets like commodities more attractive.
• Heightened volatility and dispersion: Concentrated markets and high valuations, combined with U.S. efforts to disrupt the status quo are setting the stage for market swings. A “macro-aware” asset allocation framework alongside risk-hedging strategies can help strengthen portfolio resilience.
• Capital investment boom: Rising capital spending, particularly in energy, defence, and AI infrastructure, is creating opportunities to invest in critical infrastructure and companies tied to nation-building projects.
• Expanding role of private investments: Private markets support long-term value creation and help reduce short-term portfolio volatility, while giving institutional investors access to a broader set of investment opportunities.
• Managing unintended exposures: Growing popularity of passive investing is intensifying market concentrations, heightening the need for diversified strategies.
• Innovation and flexibility: A weakening of traditional market dynamics calls for greater adaptability and resiliency in portfolio construction.

Read the IMCO World View 2026

A little more context:

The World View is our flagship annual publication, used to inform IMCO’s long-term investment strategy and positioning across a multi-billion-dollar portfolio.

The report distills complex global economic, market, and policy developments into six core themes and six corresponding investment implications, providing a clear framework for navigating the global investment landscape. Developed by IMCO's in-house economics team, with input from IMCO’s investment teams, it delivers practical, actionable insights.

In the IMCO World View 2026, we assess whether recent developments are consistent with each theme or implication's momentum accelerating, decelerating or remaining stable. We also consider whether the developments underlying a change in momentum warrant a reconsideration of the trend's validity. This evaluation is a cumulative process that assigns more weight to momentum assessments that persist for several years. For each theme, we discuss what we're monitoring. For each implication, we discuss potential investor actions.

Importantly, an assessment of slowing momentum does not mean that we see the Theme or Implication fading away. 

I highly suggest you take the time to read the full report here, it's not too long, well written and flows well from topic to topic (admittedly, I have an economics and market background, so for me it was a nice read). 

The two most interesting sections for a macro buff like me were "Inflation and Uncertainty as Policy Outcomes" on page 14 and "Diverging Policy Paths, Diverging Market Outcomes" on page 16.  

I note the following:

 The acceleration in U.S. efforts to address global imbalances, combined with Trump’s unpredictable and unconventional approach, could weigh on the USD in the years ahead while potentially lifting inflation and bond yields. To help manage the resulting risks and
opportunities, investors can:

• Shift fixed income exposure to shorter maturities, given the potential for yield curve steepening. This potential appears especially pronounced in the U.S., where an increasingly-politicized Fed could weigh on yields in the short end, while policy risks and uncertainty contribute to wider term premia – and thus yields – at longer maturities. Tariffs and a weaker USD could add further impetus for higher U.S. yields if they boost the cost of imports, with knock-on effects to inflation more generally.
• Explore potential alternatives to the USD as a store of value and safe haven during periods of market stress. Possibilities include currencies such as the Swiss franc and the Japanese yen, in addition to traditional safe-haven assets such as gold.
• Consider assets tied to production and the physical economy, including in strategically important areas such as AI- and energy-related infrastructure, technology and health care. Given that you “need stuff to make stuff”, opportunities could arise in commodities, materials, energy and other natural resources as governments look to build their country’s productive capacity while securing supply chains. Many of these assets tend to fare relatively well through inflationary periods, providing a potential complement to other inflation-sensitive assets such as real return bonds.  

And this: 

To manage risks and opportunities presented by rising volatility and widening dispersion, investors can:

• Incorporate a “macro-aware” approach to asset allocation that potentially benefits from identifying winners and losers in the shift towards a rebalanced global economy – one in which the U.S. plays a different role than investors have become used to over the past several decades.
• Rebalance geographic exposures away from the U.S. to take advantage of opportunities in countries and regions pursuing new, often fiscally-supported, growth strategies. Doing so could also help limit concentration and valuation risks arising from recent “U.S. exceptionalism” and outperformance. Canada’s response to recent trade and geopolitical pressures emanating from the U.S., including a renewed focus on large nationally-strategic infrastructure projects and a reduction in interprovincial trade barriers, could widen the breadth of investment opportunities domestically.
• Adopt tail risk hedging strategies that can help limit drawdowns through extreme market moves and events. Since such strategies become more expensive when uncertainty and expected volatility are elevated, consistently monitoring market conditions can help identify opportunistic implementation windows. Potential avenues to limiting left tail risk include the use of derivatives, owning safe-haven assets that tend to outperform through market drawdowns, reducing exposures to high-risk assets, and diversifying across asset classes, risk factors, and geographies. 

There's a lot more so I recommend you really take the time to read the report here.

I commend Nick Chamie, Senior Managing Director, Head of Total Portfolio and Capital Markets and Chief Strategist of IMCO and his team for producing this report.

It is worth noting that IMCO is the only large Canadian pension fund that produces this type of macro/ market outlook every year and publishes it and I commend them for that.        

It's not easy, it forces you to really sit with all the teams and think through all the major themes.

Obviously Nick Chamie has the final say but as he states below, it was a collaborative effort. 

Again, sticking your neck out isn't easy, a lot can happen over the course of the year and trends can shift abruptly.

One trend I'm keenly focused on right now is whether the slide in the US dollar is overdone.

My indicators tell me we are closer to the end of the downtrend and I expect the greenback to snap back. When that happens, you'll see the rally in silver, gold and copper fade.

That's more of a cyclical call, but even structurally, I have a very hard time being short US dollars even with everything going on with deglobalization. 

Also important to understand you can't have a very weak US dollar without stoking inflation fears because import prices will rise.

By the same token, you can't have a very strong euro, yen, Canadian dollar because it will impact their exports.

All this to say, people get carried away with their currency calls, I just find there are too many dollar bears out there and that tells me the trend can reverse fast.

Anyways, I need to take the weekend to reread this report more carefully but I definitely recommend you do so as well and even discuss it with your economics and capital markets and private market teams.  

Below, Nick Chamie, Senior Managing Director, Head of Total Portfolio and Capital Markets and Chief Strategist of IMCO discusses their Wold View and how they all worked on it to understand the trends and major themes impacting their investments.

Next, Joyce Chang, JPMorgan Chair of Global Research, Tom Lee, Head of Research at Fundstrat Global Advisors, and Michelle Caruso-Cabrera, CEO of MCC Global Enterprises, discuss dollar weakness, debasement, metals momentum, EM optimism, and crypto’s delayed response.

Third, Barry Knapp, Ironsides Macro, and Michael Gapen, Morgan Stanley chief U.S. economist, join 'The Exchange' to discuss the Federal Reserve, the dollar and much more.

Fourth, A prolonged weakening of the dollar brings with it a number of dangers for the US economy, according to Robert Kaplan, vice chairman at Goldman Sachs Group Inc.

“It is true, a weaker dollar boosts exports. However, the United States has $39 trillion of debt on its way to $40 trillion plus, and when you have that much debt, I think stability of the currency probably trumps exports,” he said in an interview on Bloomberg Television.

“I actually think the US is going to want to see a stable dollar and wants to see stability. They want to be able to sell the long end of the Treasury curve: a stable dollar helps,” he said.

As passed by the House of Representatives on December 17, 2025

As reported by the Senate Committee on Health, Education, Labor, and Pensions on September 8, 2025

EU Formally Designates IRGC A Terrorist Group, Granting Trump Political Cover

Update(1034ET): As expected, it happened in a meeting of top EU leaders on Thursday:

EU foreign ministers agreed Thursday to designate Iran's Islamic Revolutionary Guard Corps (IRGC) as a "terrorist" group, the bloc's foreign policy chief, Kaja Kallas, said.

"Any regime that kills thousands of its own people is working toward its own demise," she said.

One byproduct, (or perhaps the intent?) is that this will give President Trump more political cover if he decides to strike Iran. A 'narrative' is taking shape, despite the internal protests having long dissipated. 

Repression cannot go unanswered.

EU Foreign Ministers just took the decisive step of designating Iran’s Revolutionary Guard as a terrorist organisation.

Any regime that kills thousands of its own people is working toward its own demise.

— Kaja Kallas (@kajakallas) January 29, 2026

* * *

The European Union may be on the verge of taking a step it has long avoided: formally branding Iran's Islamic Revolutionary Guard Corps (IRGC) a terrorist organization. This as France and Spain, previously the bloc's vocal key holdouts, abruptly signaled a change of heart.

Paris and Madrid's reversal injects new momentum into what has so far been a largely symbolic but politically explosive move, one Brussels has repeatedly delayed despite mounting pressure. The timing of this impending potential change could signal that Europe is collectively ready to sign off on President Trump's potential new military attacks on the Islamic Republic. It will make it 'legally' easier to wage war.

via ispionline

Europe has long been more restrained when it comes to US military actions abroad, but the Jan.3rd attack on Venezuela and forced removal of longtime President Maduro resulted in a muted EU response, which was widely interpreted as quiet approval. So for the EU, its leaders might be fine with Tehran being targeted next.

On Wednesday, just one day before EU foreign ministers are scheduled to convene in Brussels to debate the issue, the Elysée announced its change in thinking in the following:

"France supports the designation of the Islamic Revolutionary Guard Corps in the European list of terrorist organizations."

The IRGC stands accused by the West of directing Iran's crackdown of domestic unrest, after economic-driven protests took over town and city streets this month. 

Thousands died, but Iran officials have pointed to armed saboteurs being mixed in among the peaceful demonstrators, leading to mayhem and a high death toll.

The United States, Canada, and Australia have already blacklisted the IRGC, while Germany and the Netherlands have for years pressed the EU to follow suit. Italy has also shifted its position earlier this week related to the recent protests.

Importantly, the US had branded Maduro as head of a 'terrorist organization' (the so-called Cartel of the Suns, which had a dubious existence) just before launching regime change action against him, resulting in him facing federal charges in New York. 

The IRGC being branded as such in Europe would also aid in Washington's case for war against Iran, given the organization reports directly to the Ayatollah, and is effectively the most important military-security group at the top of the command chain.

Tyler Durden Thu, 01/29/2026 - 10:34

Venezuela Signals Historic Energy Reset As Oil Laws Open To Foreign Capital

Authored by Cyril Widdershoven via oilprice.com,

• Venezuela is moving to overhaul its hydrocarbons law, opening the door to deeper foreign and private-sector participation.

• The reforms introduce far more flexible operating and fiscal structures, allowing private and mixed companies to take on operational control.

• If paired with sanctions relief, the changes could mark a true reopening of Venezuela’s oil sector, shifting policy from ideological rigidity toward pragmatic, investment-led recovery.

Venezuela is edging toward what could become the most consequential energy shift in a generation. Interim President Delcy Rodriguez reportedly met with senior international oil executives this week at a PDVSA facility, as the government opens consultations on a partial reform of the country’s Organic Hydrocarbons Law.

The proposed changes, now moving through Venezuela’s National Assembly, would fundamentally reshape the fiscal and contractual rules governing the country’s oil and gas sectors.

While the state would retain sovereignty over Venezuela’s oil, highlighting how the reform can foster growth and attract investment can inspire confidence among industry professionals and investors.

If approved, the new framework would allow external operators to become more deeply involved in the production process than ever before, potentially increasing foreign investment and modernizing Venezuela’s oil industry.

One of the reform’s most significant shifts is an expansion of who can operate upstream. It would allow mixed enterprises, as well as private Venezuelan-domiciled companies, to work in tandem with state authorities on contracted projects.

In essence, this would create a dual-track system, one more aligned with the financial realities of Venezuela’s oil industry. Rather than forcing all investment projects into a single joint-venture model, the government would gain more flexibility to structure deals around the realities of capital requirements.

Capital-intensive developments, including pipeline repairs, which have been neglected for many years, could finally attract the scale of private investment that they so desperately require.

The intent of the interim administration is clear. Venezuela is moving away from the inflexible investment framework that has long constrained the sector.

Perhaps even more important, however, is how the reform plans to tackle control dynamics. State-owned companies and their subsidiaries would be permitted to transfer operational responsibility to private partners by contract, either full or in part. While this may appear as a minor technical change, it represents a substantial shift in the government’s policy.

For years, Venezuela’s joint-venture system has been defined by a distinct structural rigidity. External partners have been allowed to supply capital and expertise, but operational control remained tightly held within state entities. The proposed reforms would alter that long-standing balance, giving space for hybrid operating models that are better suited to the complex nature of oil projects and to both their construction and financing.

The royalties would remain capped at 30%, but the actual rate will be set project-by-project. A new Integrated Hydrocarbons Tax will apply at up to 15% of gross income, but again would be adjusted depending on the demands of each project.

The government is also looking to address some of the financial bottlenecks that have historically worried international investors. Minority partners would not only be allowed to open and manage bank accounts in any currency or jurisdiction, but also to directly market their share of production.

Direct commercialisation improves cash-flow visibility, while offshore banking flexibility removes the friction of getting foreign direct investment into Venezuelan ventures. New project contracts will also include expanded dispute-resolution mechanisms. In essence, removing the additional layers of complications that have previously slowed or complicated arbitration agreements.

The reforms aim to make Venezuelan projects easier to finance and to protect external capital, emphasizing that stability and sanctions reform are essential for success, reassuring policymakers and investors.

The proposed changes in Rodriguez’s government acknowledge that reviving the country’s oil sector requires long-term investment, which can reassure investors and industry stakeholders of sustained commitment.

Considering the scale and scope of the large upstream developments and infrastructure projects that Venezuela’s oil industry will require to start seeing consistent increases in production, investment horizons have to be widened. The reforms are seeking to do precisely that.

While the reforms to the bill are still navigating Venezuela’s legislative process, for international investors, the intention behind them is encouraging. They represent a substantial strategic pivot, moving Venezuela’s oil industry away from the constraints of ideology and toward a programme of pragmatic partnership.

Venezuela needs investment, and that investment will come from partnerships that have the flexibility to invest in the ways and at the scale they need.

Of course, the success of the reforms will hinge on broader sanctions reform and stabilisation of the region’s geopolitical situation. But at the legislative level, Venezuela seems to be building a framework to say what it has not said clearly in years: the door is open again, and this time, the terms are negotiable.

Tyler Durden Thu, 01/29/2026 - 10:10

US Factory Orders Surged In November

While sentiment is sagging to multi-year lows, 'hard' data is pushing growth forecasts higher (GDPNOW) and holding stocks at record highs.

This morning we get a fresh glimpse at America's manufacturing segment - hard data - with US Factory Orders (admittedly for November) surging 2.7% MoM (significantly better than the +1.6% MoM expected), bouncing strongly from the 1.3% MoM decline in October. 

This dragged orders up 5.4% year-over-year...

Source: Bloomberg

This was the biggest monthly advance since May 2025.

Core Orders (ex transportation) rose 0.2% MoM, also rebounding from a 0.1% MoM decline in October...

Source: Bloomberg

The final print for Durable Goods Orders were all in line with the flash prints.

Of course, this data remains significantly stale (and we face the possibility of another government shutdown to screw things up again), but overall, the trend is your friend (and supported by strong jobless claims data).

Tyler Durden Thu, 01/29/2026 - 10:06



 

 

At The Money: Building an ETF with Wes Gray, Alpha Architect (January 28, 2026)

Have you ever had a great investment strategy and thought to yourself, “Hey, this is really good! It should be an ETF!” It is much easier than it used to be to create a strategy and put it into an ETF wrapper.

Full transcript below.

~~~

About this week’s guest:

Wes Gray is founder and CEO of ETF architect. He helps managers turn strategies into ETFs by providing turnkey, white label platforms to handle all of the complex and expensive office operations.

For more info, see:

Professional website

Masters in Business

Personal Bio

LinkedIn

Twitter

~~~

 

Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

TRANSCRIPT:

Mutual funds, trusts, and ETFs. Have you ever wondered how these are put together? Are you an analyst, strategist, or fund manager that has a really good idea? Have you thought about launching a fund to employ that idea? I’m Barry Ritholtz, and on today’s edition of At The Money, we’re going to discuss how to build your own exchange-traded fund or ETF.

To help us unpack all of this and what it means for your portfolio. Let’s bring in Wes Gray of ETF architect. He helps managers turn strategies into ETFs by providing turnkey white label platforms that handle. Legal compliance operations, portfolio management, allowing sponsors to focus on the idea and distribution, and Wes also runs the Alpha Architect Shop as well.

Full disclosure, Wes Gray and ETF architect are helping my firm, Ritholtz Wealth Management launch a new ETF later this year.

Barry Ritholtz: So Wes, let’s start with the basics. If I’m someone with a novel strategy and a good idea for a ticker, what are the elements that determine whether or not this ETF launches or whether it just dies on the vine?

Wes Gray: It’s gonna come down to low fees, capital and passion in ETF market, as you know, you gotta have low fees for the most part, or people aren’t gonna buy your product. And low fees means you also gotta have a lot of capital to back this thing. ’cause you gotta be around for at least three to five years to tell your story and then you gotta have the passion.

You’re in a market competing with monopolies like BlackRock and Vanguard. So you gotta be someone like a Perth Toll that we talked about previously where you just have to go knock on doors and tell people why your product and your story is so great.

Barry Ritholtz: I’m curious as to the timeline from the original conception to Trading Day.

What’s a realistic timeline and where are the common bottlenecks?

Wes Gray: We generally tell folks, four months, you sign the letter of intent and you’re ready to whoop it on. We can get this thing out the door in plus or minus four months. Obviously that could go out to four years, depending on your, your own internal issues.

But we’ve got this thing, so checklist and automated. At this point, if you want to launch in four months for like a relatively straightforward ETF, that’s gonna be possible.

Barry Ritholtz: Four months seems really short, but I guess I’m imagining how long it takes to accumulate enough seed capital launch. How much money under management do you need to launch an ETF? How does that get structured? What’s the usual launch dollar amount?

Wes Gray: This is a moving target. And let’s say four or five years ago we would’ve said, Hey, 5 million minimum. Now we tell people 25 million and I’m about to probably move it up to 50 million. And, really it’s, it’s not because of the operating cost of the ETF, it’s to convey credibility to the marketplace.

We, need, like people just, everyone kind of knows like, yeah, where’s your break even? You know, ’cause I want you to be in business three to five years from now, and usually that break even in people’s minds is 25 to 50 mil. High barrier to entry just on that.

Now, how do you seed these things?

Well, there’s basically two methods. You either seed with cash. So you launch the ETF and people go open up their Schwab account and click the button and you know, pay cash to buy your ETF. Or you can seed it with property where there, it’s a little bit convoluted, but there’s this thing called Section 351 where you can actually contribute property tax free to seed the ETF.

So basically, cash or property is the two methods you can use.

Barry Ritholtz: And I’m assuming property is usually individual stocks or bonds. Is that right?

Wes Gray: You got it. So, so if you have a portfolio of securities, public securities that naturally fit in the CTF, you can contribute those tax-free. And then that, that property serves as initial seed for essentially the launch of the ETF.

Barry Ritholtz: You mentioned break even. Take me into the minutia of what the backend of this looks like – legal, audit, administration, listing distribution, marketing. What are the big costs that any ETF manager has run? Where do people kind of make mistakes with these?

Wes Gray: I’ll kind of reverse the, the question and, and let me tell you what we’ve done, the cost and what you have to do, because what you’re asking about is a total dumpster fire behind the scenes, but essentially for our platform is you show up with the spreadsheet, tell us what to do. And you go market and distribute this thing, comma compliantly. ’cause we have oversight responsibilities. That’s your two primary jobs.

We’re gonna deal with all the dumpster fire behind the scenes and the generic cost of doing this to launch an ETF, again, all sandbag for a generic ETF, just with easy numbers. You’re looking at a 50k startup, soup to nuts. Which is not the bad news.

The bad news is the ongoing. Cost to deal with all the aspects you just talked about, and you know, it’s plus or minus, but you’re looking around 200K a year. What the heck does that mean as a business, uh, setup? Well, it, you know, if you charge 1%, your breakeven is 20 million.

If you charge 20 basis points, which is a much, you know, much more marketable, your breakeven is a hundred million. And then everything in between. So, so obviously your breakeven depends on your fee, but you’re looking at 200 k burn a year on average.

Barry Ritholtz:  Let’s say someone comes to you with a systematic strategy. How do they decide whether or not this is based on an index and running it fairly statically versus a more active ETF that’s run more dynamically.

Wes Gray: This advice has also changed over time. We’re we’re, in the old days, we would say, Hey, index active, there’s a bigger trade off there now.

It’s almost always the case. Just go active. Even if your strategy is a hundred percent systematic, why is that? Well, there’s just low overhead cost. I don’t have to pay for a third party index agent. I don’t gotta pay for third party service providers. And, and I also have a little bit more flexibility at the margin.

So for example, let’s say I’m on an index versus an active, and I’m doing the exact same strategy, but we know this week there’s gonna be three Fed meetings and. You know, the world’s gonna blow up. I might not wanna rebalance this week, I’ll just punt to next week. That’s easy in an active strategy, in an index strategy that’s possible — but the paperwork trail and the compliance to be able to facilitate, that’s essentially a nightmare.

Which means most index funds just follow the book no matter what, on unlike little minutiae decisions like this. We recommend active at the margin.

Barry Ritholtz: You must see a ton of different strategies. What do you see that really. Shouldn’t be put into an ETF. What, what kind of strategy, even if a manager is passionate and excited about the idea, what, what are the sort of red flags that, “Hey, you don’t want this in an ETF?”

Wes Gray: I don’t know if I’m weird or just old school or conservative, but, but if I’m not gonna recommend this to my parents or my, my grandma. Why we have this in an ETF where anyone with a Schwab account can click the button and have a party, right?

What does that mean? Things like double levered, triple levered, whatevers, uh, a lot of these gimmicky products that are extremely expensive and they have tons of embedded costs via like swaps and a lot of other things that aren’t transparent. I can’t stand those products personally.

Does that mean that people won’t do ’em? Well, of course not. If you can sell out to people that are gonna pay 1% for your stupid idea, great. But I’m not a big fan of having those products in the ETF marketplace.

Barry Ritholtz: You’re not a big fan of the inverse three x levered Bitcoin.ETFI?

Wes Gray: No, I’m not a fan. And again, maybe I’m just a funny duddy and I need to move on in the world, but I’m just kinda, old school, I like, you know, low fees, transparent, tax efficient things that people can understand, uh, that presumably add value, uh, in the long game.

Barry Ritholtz: Let’s talk about, uh, some of the block and tackling once an ETF is created and launched, how, how do you think about. What I think about as someone who was on a trading desk as good market behavior, meaning tight spreads, reasonable liquidity, especially if the ETF is holding some assets that are perhaps a little less liquid than than average.

Wes Gray: That’s a great question and, and it creates a lot of confusion in the marketplace.

There are, there’s basically two types of ETFs, one we’ll call liquidity diamonds. These are ETFs that everyone knows, right – like SPY or Triple Q – where when you go and transact in those ETFs, it’s very likely that you’re actually trading shares with someone else who actually owns those ETF shares. That’s rare. Right, because it’s just such a huge market.

The other set of ETFs, which is 99.99% of ’em is normal ETFs, where when you go access the marketplace, you’re accessing what they call primary liquidity, which means you’re asking a market maker to give you a bid ask spread.

So the vast majority of that bid ask spread. Is simple to understand. What would it cost you as a trader to acquire or dispose of that basket of securities? For example, if I’m trading the triple levered Zimbabwe Bitcoin swaps, well, my bid ask spread might be 10%. Why? Where if I’m trading a basket that’s s and p 500 stocks, even though the ETF maybe never trade, but once a year.

We could trade a billion dollars of that ETF with a couple basis points of impact. So it just depends on the underlying basket liquidity.

Barry Ritholtz: You may notice I didn’t ask an obvious question, “Hey, do you go ETF structure or not?” I think we all understand the advantages of this structure — intraday liquidity, no phantom capital gains taxes.

What might send us in a different direction, an SMA, a mutual fund to trust when is an ETF really not the right structure.

Wes Gray: Another great question. So ETFs, and unfortunately we run ETF architects, so everything should be at an ETF, of course. Right? But you know, let, let’s be honest here, the big disadvantages of the ETF structure are transparency.

And you cannot close an ETF. So if we have a strategy where transparency is just not, you know, gonna play favorably for my shareholders, ’cause I, I don’t wanna expose this to the world every single day, then obviously you can’t do an ETF for all intents and purposes. The other one is capital constraints.

So let’s say we’re trading the microcap strategy and penny stocks, where the maximum amount of capital that can go in there is called 50 a hundred mil. Beyond that I’m gonna start blowing the whole concept up. You cannot stop or close an ETF, whereas an SMA or mutual fund, obviously they, they have tools in which you can actually capacity constrained, uh, the capital you take on.

Barry Ritholtz: We have noticed just a tremendous amount of flows are going to the big three – they go to BlackRock, they go to Vanguard, they go to State Street, and broad passive indexes have dominated a lot of the flows. The exception has been these kind of new, clever, unusual, active funds that occasionally catch people’s fancy.

If you’re thinking about creating an ETF, what sort of space should you really be looking in? What sort of strategy is the best ETF alternative to the core of a lot of people’s portfolios, the big indexes.

Wes Gray: I would basically focus on things that Vanguard or iShares can’t do well, which is you can usually gonna be very boutique, very niche strategies where it takes some special expertise to put those portfolios together and or you can’t jam a trillion dollars into the strategy.

Basically be good at being a boutique, ’cause you’re never gonna beat Vanguard at delivering scale trillion dollar market beta. That’s insanity.

Anytime you have a strategy that, that Vanguard is not offering because it’s either really complex, really differentiated, hard to explain, hard to build, hard to manufacturer, or there’s just not massive scalability, that’s where you’d wanna focus.

If you can put a trillion dollars in your strategy without any breaks, it’s probably not gonna work,  because Vanguard’s already doing it and we don’t wanna compete with the monopoly.

Barry Ritholtz: To wrap up, if you’re an analyst or strategist, or even fund manager, and you have a unique idea that you think will do well in the market as well, as well in the marketplace, you think others are willing to pay for it with their capital, consider launching your own ETF. You need about $25 million in assets and a cost of about a quarter million dollars annually, but the upside are potentially hundreds of millions or even billions of dollars in client assets.

I’m Barry Ritholtz and this is Bloomberg’s at the Money.

~~~

Find our entire music playlist for At the Money on Spotify.

 

The post At The Money: Building an ETF appeared first on The Big Picture.

Trump Says John Deere Will Invest $70 Million To Build Excavator Factory In North Carolina

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

President Donald Trump announced on Jan. 27 that farm equipment maker John Deere will invest $70 million to build an excavator factory in North Carolina.

A John Deere excavator piles road salt in preparation for a winter storm at the Boston Public Works Department yard in Boston on Jan. 28, 2022. Scott Eisen/Getty Images

“It’s brand new, the best in the world. And I think it’s going to pay off very, very big,” the president said during an event in Iowa. “We don’t make them here. This is going to be the only excavator entirely made in the United States of America.”

The White House later said in a post on X that John Deere will build two new factories in the United States, including one in North Carolina that will help “move excavator production BACK to America.”

The second factory is a state-of-the-art distribution center, which will be built near Hebron, Indiana, the company said in a Jan. 27 statement. Both facilities are expected to open next year, it said.

John Deere said the North Carolina plant will manufacture excavators previously produced in Japan and will employ more than 150 workers when it opens.

The company said that it has broken ground on the Indiana project, a facility designed to streamline John Deere’s operations and ensure the timely delivery of equipment and parts. The project is expected to generate about 150 jobs, it added.

“Our investment in these new facilities underscores John Deere’s dedication to strengthening the backbone of American industry and supporting local economies,” John Deere CEO John May said. “We believe in building America, and these projects represent our intent to continue driving innovation and job creation in the United States.”

John Deere said last year that it would invest $20 billion in the United States over the next decade, calling it “a powerful signal” of its long-term commitment to building and growing domestically.

The company also made clear that it has no plans to shut down domestic manufacturing.

Texas Department of Agriculture Commissioner Sid Miller speaks to The Epoch Times in Irving, Texas, on Sept. 22, 2023. Samira Bouaou/The Epoch Times

Texas Agriculture Commissioner Sid Miller welcomed the move on Jan. 27 and expressed hope that John Deere would choose Texas as the site to build its next factory.

“I applaud President Donald J. Trump for standing up for American workers and bringing manufacturing back home. John Deere’s decision to build new factories in the United States is a win for our economy, our workforce, and our national security,” Miller said in a post on Facebook.

“This is the kind of leadership that puts America first and rebuilds our industrial strength. Now let’s keep that momentum going and make sure the next one is built right here in Texas.”

Tyler Durden Thu, 01/29/2026 - 09:50

Brent Surges To 4 Month High Above $70 After Trump Threatens Iran With Military Force

By Charles Kennedy of OilPrice.com

Brent Crude prices topped $70 per barrel - and $71 shortly after - early on Thursday for the first time since September, as U.S. President Donald Trump warned Iran that a “massive armada” of U.S. Navy ships is headed to the Persian Gulf. 

At the time of writing, Brent Crude prices had jumped by 3.38% at $70.71. This was the highest in more than five months and the first time the international benchmark has topped $70 per barrel since early August. The U.S. benchmark, WTI Crude, was also trading higher, up by 3.51% to $65.43. WTI topped $65 per barrel for the first time since September. 

After a week or so of relative calmness in the U.S. rhetoric toward Iran, which continued to brutally suppress mass protests, President Trump warned the Islamic Republic of a Venezuela-style “mission,” at least this is what the President suggested in a post on his Truth Social platform.

“A massive Armada is heading to Iran. It is moving quickly, with great power, enthusiasm, and purpose,” President Trump posted.

“It is a larger fleet, headed by the great Aircraft Carrier Abraham Lincoln, than that sent to Venezuela. Like with Venezuela, it is, ready, willing, and able to rapidly fulfill its mission, with speed and violence, if necessary,” the President continued.

He urged Iran “to make a deal” pledging “NO NUCLEAR WEAPONS,” otherwise, President Trump said, “The next attack will be far worse! Don’t make that happen again.”

Markets reacted to the renewed tension in the world’s most important oil-producing and exporting region, and oil and gold soared.

Iran, for its part, said that its army is ready to “immediately and powerfully” respond to any possible attack by the United States.

“Our brave Armed Forces are prepared—with their fingers on the trigger—to immediately and powerfully respond to ANY aggression against our beloved land, air, and sea,” Iran’s Foreign Minister Abbas Araghchi posted on X.

If Trump tries to enforce a blockade, Iran will retaliate using asymmetrical means.

The Houthis caused havoc for global trade by hitting just 30 vessels over two years. Iranian attacks on merchant vessels in the Persian Gulf will have far greater impact.https://t.co/oLKvUzFrVd

— Esfandyar Batmanghelidj (@yarbatman) January 28, 2026

Commenting on the latest flare-up in the Middle East, ING commodities strategists Warren Patterson and Ewa Manthey said on Thursday, “Clearly, this more aggressive rhetoric has left the oil market nervous about the potential for supply disruptions.”

Tyler Durden Thu, 01/29/2026 - 09:35

Rubio Announces Start Of US-Denmark-Greenland Talks Amid Arctic Security Push

Authored by Kimberley Hayek via The Epoch Times,

Technical discussions between the United States, Denmark, and Greenland on improving Arctic security have begun, Secretary of State Marco Rubio said Wednesday.

The talks originate from a working group created earlier this month during a Washington meeting including Rubio, Vice President JD Vance, and the foreign ministers of Denmark and Greenland.

“It begins today and it will be a regular process,” Rubio told the Senate Foreign Relations Committee. “We’re going to try to do it in a way that isn’t like a media circus every time these conversations happen, because we think that creates more flexibility on both sides to arrive at a positive outcome.”

“We’ve got a little bit of work to do, but I think we’re going to wind up in a good place, and I think you’ll hear the same from our colleagues in Europe very shortly,” Rubio said.

The initiative comes after President Donald Trump has said that the United States must secure Greenland to increase national security against Russia and China. European allies have rebuked Trump’s approach.

Trump recently threatened tariffs on Denmark and other European nations opposing his Greenland overtures before brokering a preliminary framework with NATO Secretary-General Mark Rutte.

At the World Economic Forum in Davos, Switzerland, last week, Trump said no military force would be used for acquiring the island, stating, “I don’t have to use force. I don’t want to use force. I won’t use force.”

Trump has portrayed the deal as providing total access to Greenland without payment or time limits, underscoring the Golden Dome missile defense system.

“There’s no end, there’s no time limit,” he said, adding, “We’re not doing a 99-year or a 10-year [deal] or anything else.”

The president assigned Rubio, Vance, and special envoy Steve Witkoff to work on the negotiations.

NATO has highlighted the framework’s goal of preventing Russia and China from establishing economic or military footholds on the island.

Alliance spokesperson Allison Hart noted discussions among Arctic member states to bolster collective security, stating that talks with Denmark and Greenland strive to deter adversaries.

“We need to defend the Arctic,” Rutte said at Davos.

Greenland lies along key missile trajectories, vast mineral resources, and emerging shipping routes.

The United States maintains Pituffik Space Force Base there, where it has situated early-warning radars.

Russia oversees extensive Arctic infrastructure, such as dozens of bases and icebreakers.

Russia’s robust Arctic infrastructure poses a direct challenge, with more than 50 revitalized Soviet-era installations, including six army bases, 10 radar stations, and more than 60 icebreakers—far outpacing the United States’ two.

“It is important to consistently strengthen Russia’s positions in the Arctic, comprehensively develop our country’s logistics capabilities, and ensure the development of a promising Arctic transport corridor from St. Petersburg to Vladivostok,” Russian President Vladimir Putin said in November 2025.

China, meanwhile, pursues a “Polar Silk Road” for influence through investments in infrastructure and resources, according to a 2024 RAND Corporation analysis.

Eric Cole, a former CIA officer and CEO of Secure Anchor, described Greenland as a “forward lookout post for the entire North Atlantic security architecture.”

“Greenland’s geographic position places it directly beneath the shortest flight paths between North America, Europe, and Eurasia, making it a natural vantage point for monitoring air and missile activity,” Cole told The Epoch Times.

“Sensors based in Greenland can track aircraft, space objects, and missile launches that would otherwise go undetected until much later in their trajectory. This early detection is critical for both U.S. and NATO forces, as it expands warning times and improves coordinated response options.”

Tyler Durden Thu, 01/29/2026 - 09:00

The post The AI Bubble #24,736: Consumption Is Outrunning Wages appeared first on CEPR.

Futures Rise As Meta Jumps, Microsoft Plunges; Gold Just Won't Stop

Futures are higher, led by tech, after the first batch of Mag7 earnings with gold breaking new record highs again, rising as high as $5600. As of 8:00am ET, S&P futures are up 0.2% while the Nasdaq if barely in the green; pre-mkt it's a mixed picture with META (+7.9%) rising on higher than expected capex forecast, while MSFT (-6.6%) tumbles on... higher than expected capex forecast; TSLA is also modestly in the green, up +2.8%; AAPL reports today today then AMZN / GOOG next week. Cyclicals are trading higher led by Energy and Industrials and the AI theme also acting well as capex / fundamentals remain supportive of growth. The yield curve is twisting steeper with the USD flat. Commodities remain bid across all 3 complexes with WTI (Iranian supply fears) and precious (fiat incineration trade) the most notable. Today’s macro data focus is on jobless claims though given Powell’s comments yesterday, Friday’s PPI is more important.

In premarket trading, Mag 7 stocks are mixed: Meta (META) rises 8% after the Facebook parent gave a revenue outlook that was much stronger than expected, which helped offset the surge in projected capex; Microsoft (MSFT) falls 6% after the software giant’s report featured an underwhelming read on growth in its Azure cloud-computing business. Analysts also noted higher-than-expected expenses. Tesla (TSLA) gains 2% after the electric-vehicle giant reported adjusted earnings per share for the fourth quarter that topped the average analyst estimate. The company also announced a $2 billion investment in xAI and provided updates on its physical AI ventures (Nvidia (NVDA) -0.2%, Apple (AAPL) +0.5%, Amazon (AMZN) -0.3%, Alphabet (GOOGL) +1.7%)

• Rare earth stocks fall sharply after a report from Reuters said the Trump administration is backing away from plans to guarantee a minimum price for critical minerals projects, citing multiple sources. MP Materials has since refuted the report
• Celestica (CLS) falls 5% after the company reported its fourth-quarter results and gave an outlook. While the results were better than expected, analysts noted higher capex as a potential reason behind the stock’s decline.
• CH Robinson (CHRW) rises 5% after the logistics company reported adjusted earnings per share that beat analyst estimates, despite macroeconomic headwinds from global trade policies.
• Dow Inc. (DOW) slips 2% as the chemical company said it will terminate about 4,500 roles as part of a plan to simplify and streamline its end-to-end processes. It also reported net sales for the fourth quarter that were in-line with the average analyst estimate.
• International Business Machines (IBM) gains 9% after the IT services company reported fourth-quarter results that beat expectations. Analysts highlighted software revenue and free cash flow as positive.
• International Paper Co. (IP) rises 5% on plans to break up and spin off its European packaging operations.
• Las Vegas Sands (LVS) drops 10% after the casino operator’s Macau properties — including The Venetian and Londoner — fell short of Wall Street’s expectations.
• LendingClub (LC) falls 7% after posting fourth quarter results. BI analyst Herman Chan writes that pre-provision profit missed slightly amid higher marketing expenses and guidance looks somewhat lighter than market expectations.
• ServiceNow (NOW) is down 8% after the software company reported its fourth-quarter results and gave an outlook. Analysts are broadly positive, but Bloomberg Intelligence noted that the backdrop remains uncertain.
• Southwest Airlines (LUV) rises 5% after reporting results that topped analyst estimates, signaling the fruits of a turnaround. Shares are climbing 6.2%.
• VSE Corp. (VSEC) rises 1% after agreeing to buy closely held Precision Aviation Group for about $2.025 billion in a cash-and-stock deal.
• Whirlpool (WHR) falls 11% after the appliance maker’s ongoing earnings-per-share forecast for the full year trailed the average analyst estimate. US levies on imports have yet to give the company an edge over foreign rivals, its chief executive said.

Big tech is back in focus, with markets rewarding AI-heavy capex when it’s paired with stronger-than-expected core business growth, as seen at Meta, or punishing it when momentum disappoints, as Microsoft found out the hard way. 

Meta’s stronger-than-expected revenue outlook helped cushion concerns over rising AI-related spending. The social media giant reported fourth-quarter sales of $59.9 billion, beating the $58.4 billion that Wall Street anticipated.  t signaled that while spending is up, the core business supporting those investments is also growing faster than expected. If Meta hits the top-end of capex guidance for 2026, it will mean a jump of roughly 87% from 2025.

Microsoft’s record spending and slower cloud growth sent its shares down sharply amid investor concerns that it could take longer than expected for the company’s AI investments to pay off. Capex for fiscal second quarter hit $37.5 billion, up 66% from a year earlier and exceeding analyst estimates for $36.2 billion. The Azure cloud-computing unit posted a 38% revenue gain when adjusting for currency fluctuations, just meeting analyst projections.

“We’re back to the theme that we’re not seeing monolithic growth for all the tech companies,” said Rory McPherson, chief investment officer at Magnus Financial Discretionary Management. “Capex spending has increased across the board. The market is just rewarding the ability to monetize it, while placing question marks on companies that aren’t able to do that.”

Looking at earnings, out of the 119 S&P 500 companies that have reported so far in the earnings season, 77% have managed to beat analyst forecasts, while 16% have missed. Caterpillar, Dow and Honeywell International are among many companies expected to report results before the market opens. Caterpillar’s revenue is set to accelerate in 4Q, largely driven by higher volume across all segments, as momentum continues to build into 2026. Margin pressure is likely to persist in 4Q due to a step-up in tariffs (about a $725 million headwind) and manufacturing costs. Earnings from Apple, KLA and Stryker and follow later in the day.

The Stoxx 600 rises 0.4%, with mining, energy and industrial shares leading gains. Technology stocks underperform with Germany’s SAP plunging as much as 13% after reporting a disappointing cloud backlog. Meanwhile, miners outperform. Here are the biggest movers Thursday:

• 3i Group shares rise as much as 15% in London, rebounding from a recent plunge, after the investment firm’s latest results showed a better-than-expected performance for its discount retail business, Action
• ABB rises as much as 9.8% after the Swiss firm predicted higher profitability this year amid a boom in data centers and also announced a $2 billion share buyback. JPMorgan describes orders in the electrical and automation divisions as “blowout”
• STMicro shares rise as much as 5% after the chipmaker gave a better-than-expected 1Q revenue forecast, showing signs of cyclical recovery in demand for analog chips
• EssilorLuxottica shares climb as much as 2.5%, snapping four days of declines. Meta CEO Mark Zuckerberg on an earnings call said it’s “hard to imagine a world in several years where most glasses that people wear aren’t AI glasses”
• European mining shares are the best-performers on the Stoxx 600 benchmark on Thursday after copper posted its biggest one-day gain in years to hit a record above $14,000 a ton
• EasyJet shares rise as much as 3.1% after the airline reported solid first-quarter results and left its outlook for fiscal year 2026 broadly unchanged
• SAP shares drop as much as 13%, the biggest intraday decline in more than five years, after the software firm reported 25% growth in current cloud backlog on constant-currency basis
• H&M shares drop as much as 4.3% after the fashion retailer reported softer current trading than expected, with RBC saying 4Q sales are “a little light” vs. consensus estimates
• Nokia declines as much as 7.4% after the Finnish communications group reported its latest earnings. Analysts say the backwards-looking figures in the report are strong, but 2026 guidance for Network Infrastructure is disappointing
• Givaudan drops as much as 6.7% to the lowest since Oct. 2023 after the Swiss fragrance and flavor maker delivered a weak like-for-like performance in the fourth quarter
• SEB falls as much as 5.7%, the most since April 2025, after the Swedish lender reported its latest earnings, which analysts describe as weak, with a large miss on profits the key disappointment, overshadowing better-than-expected dividends
• Roche shares drop as much as 2.1% after the Swiss drugmaker reported results for the fourth quarter which Intron Health analysts called “soft.” The company also provided guidance for 2026, and analysts see potential for consensus expectations to be cut as a result
• Interroll shares fall as much as 9.6%, the most since last April, after the Swiss industrial-equipment firm’s full-year sales undershot the average analyst estimate. Analysts see some bright spots in the report but highlight headwinds
• Hilton Foods shares drop as much as 9.2%, the most in two months, after the meat producer issued a cautious outlook as inflationary pressures in beef and white fish continue

Earlier in the session, Asian equities edged higher amid mixed trading in heavyweight tech names. Shares in Indonesia pared losses. The MSCI Asia Pacific Index was up 0.2%, after falling as much as 0.7%. SK Hynix and Japan’s Advantest, which surged after its earnings beat, were the biggest boosts to the gauge, while TSMC, Tokyo Electron and Samsung weighed the most. The Indonesian benchmark plunged for a second day, before trimming most of the losses, as investors continue to fret over MSCI’s warning over the market’s investability. The index tumbled as much as 10% before closing 1.1% lower as local regulators said they would double the minimum free-float requirement starting next month.

In FX, the Bloomberg Dollar Spot Index is little changed having erased an earlier fall. The greenback has struggled this year as investors bet on its long-term decline, with unpredictable policymaking and ballooning deficits adding to its woes. The dollar hasn’t acted like a haven for some time as investors increasingly favor tangible alternatives such as precious metals, DoubleLine Capital Chief Executive Officer Jeffrey Gundlach told CNBC.

“The risks of another major leg lower in the dollar remain elevated, even if our bias is for a short-term recovery, given the overall supporting macro and rates picture,” wrote strategists at ING Groep NV including Francesco Pesole.

In rates, treasuries are steady, with US 10-year yields near flat at 4.25%. European government bonds are also little changed.

In commodities, Brent crude futures hit $70 a barrel for the first time since September after US President Trump warned Iran to make a nuclear deal with the US or face military strikes far worse than the attack he ordered last June.

Copper surged by the most in more than 16 years, surging about 6% and earlier hitting a record above $14,000 a ton as metals extended a dramatic start to the year, fueled by a wave of intense speculative trading in China. Spot gold also crossed $5,500/oz for the first while silver briefly surpassed $120/oz, extending its year-to-date advance to around 63%.

“We still have some exposure to gold but at these prices I wouldn’t be that long on it,” said Dan Boardman-Weston, chief investment officer at BRI Wealth Management. “You need it for diversification and it’s been wonderful over the past two years, but now I’m minding my exposure to it.”

The US economic calendar includes 3Q final nonfarm productivity and unit labor costs, weekly jobless claims and November trade balance (8:30am), November factory orders and wholesale trade sales (10am)

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.3%
• Russell 2000 mini +0.2%
• Stoxx Europe 600 +0.4%
• DAX -1%
• CAC 40 +0.6%
• 10-year Treasury yield +1 basis point at 4.25%
• VIX +0.1 points at 16.45
• Bloomberg Dollar Index little changed at 1178.44
• euro little changed at $1.1955
• WTI crude +2.1% at $64.53/barrel

Top Overnight News

• Talks between top Senate Democrats and the Trump administration to avert a government shutdown have moved closer to Democrats’ demands, though no deal has been reached yet, a person familiar said. Talks included restrictions on ICE agents. BBG
• US Senate Majority Leader Thune sees a possibility to avoid a shutdown by week’s end after Senate Minority Leader Schumer lays out Democrats' demands on ICE: CNN
• President Trump is weighing options against Iran that include targeted strikes on security forces and leaders to inspire protesters, multiple sources said, even as Israeli and Arab officials said air power alone would not topple the clerical rulers. RTRS
• Nvidia, Microsoft and Amazon may invest up to $60 billion in OpenAI’s new funding round. The Information
• Nvidia Corp. hasn’t yet received any orders from Chinese customers for its H200 AI chips as Beijing is still deciding whether to allow imports of the US firm’s components, according to Jensen Huang. BBG
• Cuba only has enough oil to last 15-20 days at current levels of demand and domestic production after its sole supplier Mexico appeared to cancel a shipment while the US blocked deliveries from Venezuela. FT
• Chairman of a US House of Representatives committee said in a letter that NVIDIA (NVDA) helped DeepSeek hone AI models later used in China's military: Reuters.
• Gold and silver hit new records, lifting commodities as a weaker dollar and geopolitical tensions fueled demand. Copper surged on speculative trading in China. Brent hit $70 a barrel after Donald Trump renewed threats against Iran. BBG
• Shares in Chinese property developers surge on news that China has done away with borrowing limits on property developers known as its "three red lines" policy, an apparent end to rules that triggered a debt crisis which continues to weigh on the world's second-largest economy. RTRS
• Indonesia’s stock market suffered its worst two-day rout since 1998, triggered by MSCI’s warning of a possible market downgrade due to transparency concerns. Regulators stepped in and announced plans to double the minimum free-float requirements. BBG
• Sweden’s central bank held its key rate at a three-year low of 1.75%, as expected, and stuck with its forecast for no change until next year. BBG
• Regional banks are on track to outperform the S&P 500 for a third month, the longest streak since 2022. With valuation multiples still below their long-term average and 10% of an S&P gauge set to disclose results in the next two days, the door is open to more gains if profits come in strong.
   

Notable earnings

• Tesla Inc. (TSLA) Q4 2025 (USD): Adj. EPS 0.50 (exp. 0.45), Revenue 24.9bln (exp. 24.77bln). Gross margin 20.1% (exp. 17.1%). Operating income 1.41bln (exp. 1.32bln). Free cash flow 1.42bln (exp. 1.59bln). In Q1 of this year, we plan to unveil the Gen 3 version of Optimus. Plan to begin megapack 3 and megablock production at megafactory Houston in 2026. On Jan 16, agreed to invest ~2B to acquire shares of Series E Preferred stock of xAI. Shares +3% pre-market
• Microsoft Corporation (MSFT) Q2 2025 (USD): EPS 5.16 (exp. 3.92), Revenue 81.3bln (exp. 80.28bln). said net gains from OpenAI investments totaled USD 7.6bln, which resulted in an increase in diluted earnings per share of USD 1.02/shr. Operating income 38.3bln (exp. 32.9bln). SEGMENTS:. Q2 Azure and other Cloud services revenue increased 39% (exp. 38.8%). Productivity and Business +16% at USD 34.1bln (exp. 33.5bln). More Personal Computing: USD 14.3bln (exp. 14.33bln). Cloud revenue +26% to USD 51.5bln. Intelligent cloud revenue USD 32.9bln. Commercial RPO +110% to USD 625bln. Shares -6.4% pre-market
• Meta Platforms Inc (META) Q4 2025 (USD) EPS 8.88 (exp. 8.19), Revenue 59.9bln (exp. 58.38bln). Sees Q1 rev. USD 53.5bln-56.5bln (exp. 51.3bln). Sees 2026 capex USD 115bln-135bln (exp. 110.6bln). Shares +7.9% pre-market
• International Business Machines Corporation (IBM) Q4 (USD) Adj. EPS 4.52 (exp. 4.33), Revenue 19.7bln (exp. 19.21bln). Sees FY constant currency rev. growth of over 5%. Sees FY2026 revenue USD 70.14bln (exp. 70.16bln). Sees FY free cash flow to increase by about USD 1bln. Shares +8.2% pre-market
• SAP (SAP GY) Q4 2025 (EUR): Adj. oper. profit 2.83bln (exp. 2.75bln), Revenue 9.68bln (exp. 9.74bln), Cloud Revenue 5.61bln (exp. 5.64bln), Cloud/Software Revenue 8.62bln (exp. 8.68bln); announced up to EUR 10bln buyback, to start Feb 2026. Shares -14%

Trade/Tariffs

• China's MOFCOM spokesperson, when asked about a potential round of US-China trade talks, said China is willing to work with the US side to jointly uphold and implement the important consensus of the two heads of state, Global Times reported.
• Chinese President Xi said they are willing to consider implementing a unilateral visa-free system for British nationals

Central Banks

• Riksbank leaves its policy rate unchanged at 1.75% as expected; reiterates that the policy rate is expected to remain at this level for some time to come, in line with the forecast in December.
• BoK said uncertainty surrounding US monetary policy is likely to persist and it reiterated it will closely monitor financial markets.
• HKMA maintains its base rate at 4.00%, as expected.
• Monetary Authority of Singapore kept the prevailing rate of appreciation of the SGD NEER policy band, as well as made no change to the width and level the band is centred, as expected. said:. Output gap will be positive for the year as a whole. Growth this year is expected to remain resilient. Expects 2026 GDP growth to ease Y/Y.
• Brazilian BCB Policy Announcement 15% vs. Exp. 15.00% (Prev. 15.00%); said it will start cutting rates next meeting.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued with sentiment in the region clouded following a lack of fireworks at the FOMC, where the Fed kept rates unchanged at 3.50%-3.75%, as expected, while top- and bottom-line earnings beats from the likes of Meta, Microsoft and Tesla also failed to spur the broader risk appetite. ASX 200 marginally declined amid underperformance in telecoms and miners, while a surge in exports and import prices added to the inflationary risks and the case for an RBA rate hike next week. Nikkei 225 swung between gains and losses amid currency-related headwinds and earnings results. KOSPI saw two-way price action amid fluctuations in tech heavyweights Samsung Electronics and SK Hynix despite both companies posting stellar earnings results. Hang Seng and Shanghai Comp were mixed with price action relatively flat amid a lack of fresh pertinent macro catalysts for China, although property names were supported after reports that several developers are no longer required to submit the monthly “three red lines” indicators, which are debt metrics introduced in 2021 to curb builders' financial leverage.

Top Asian News

• India's Economic Survey has FY27 growth in a 6.8-7.2% range. Weaker INR causes investors to pause.
• China market liquidity will remain ample in February, according to analysts cited by China Securities Times.
• Google (GOOG) took action against a Chinese company linked to a massive cyber weapon.

European bourses (STOXX 600 +0.4%) are broadly firmer, but with clear underperformance in the DAX 40 (-1.2%), which has been dragged down by post-earnings losses in SAP (-14%). The software giant disappointed on cloud revenue and poor cloud backlog metrics. European sectors are mixed; Basic Resources is the clear outperformer, boosted by continued strength in underlying metals prices and following Glencore (+3%) and Antofagasta (+6%) releasing their FY26 copper production guidance, with both companies indicating strong production throughout the year. Among underperformers, Chemicals has been pressured by Givaudan (-6%) post-earnings, followed closely by Tech, dragged lower by losses in SAP.

Top European News

• Germany's Chancellor Merz said they are now seeing the first signs of recovery in the German economy.
• French Finance Minister Lescure said recent FX moves reflect fundamentals.
• Chinese President Xi said to UK PM Starmer that the UK-China relationship in recent years had seen “twists and turns that did not serve the interests of our countries”. said:. China stands ready to develop with the UK a long-term and consistent strategic partnership . More dialogue between the UK and China was “imperative”.

FX

• DXY resides in a current 96.01–96.35 range, well within yesterday’s 95.859–96.787 parameter, with little movement seen following the FOMC decision and press conference yesterday. There was a lack of major surprises or fireworks from the meeting and presser, although Powell noted that rates are at the higher end of the neutral range, and that if the tariff effect on goods pricing is seen to peak this year, it would signal to the Fed that it can loosen policy. Looking ahead stateside, US initial jobless claims for the week of 24 January are expected at 205k (prev. 200k), while continuing claims (week of 17 January, coinciding with the BLS’ traditional survey window for the January jobs report) are seen at 1.86mln (prev. 1.849mln). The Chicago Fed’s Labour Market Indicators are also due today. Final Q3 unit labour costs data are also scheduled, alongside US trade data for November and factory orders for November.
• EUR/USD remains sub-1.2000 after finding some resistance at 1.1996 overnight, while still remaining within yesterday’s 1.1896–1.2045 range. There has been little of note for the EUR as participants gear up for next week’s ECB meeting, with some focus on Governing Council commentary. Aside from that, price action this morning has been largely USD-driven. GBP/USD found resistance near yesterday’s high (1.3846) before waning, with the pair remaining within yesterday’s parameter.
• USD/JPY is softer and back below its 100-DMA (153.71), trading within a 152.76–153.46 band, with price action largely in tandem with the USD in the absence of fresh macro drivers. Traders will be keeping an eye on the geopolitical landscape amid further punchy rhetoric from both Iran and the US. Domestically, a Nikkei poll showed that Japanese PM Takaichi’s party is expected to gain a Lower House majority.
• Antipodeans outperform, with AUD outpacing peers as the commodity-linked currency benefits from the surge in spot gold and copper prices, despite a lack of obvious drivers for the magnitude of gains seen. Data from Australia also showed firmer export and import prices.

Fixed Income

• USTs are, once again, near enough flat, holding off lows in the 111-16+ to 111-26 range. Post-FOMC updates have been light. In brief, the Fed held policy in a decision that saw two dovish dissenters (Miran and Waller), while the statement outlined a more optimistic outlook on the economy and labour market. Overall, the statement and presser left the Fed narrative largely unchanged, although the omission of the line referring to “downside risks to employment” lent a slight hawkish tint to the statement—a point reflected at the time in upside pressure at the short end of the yield curve. This morning, yields are bid across the curve, which is marginally steeper, with the 10yr back above 4.25%, though still shy of last week’s JGB-induced 4.31% YTD peak.
• EGBs were flat this morning, but have gradually edged higher to a peak around the 128.13 area, with gains of up to 10 ticks. Earnings are once again dominating the European newsflow, with the DAX 40 underperforming on account of SAP, though Bunds themselves do not appear to be reacting.
• Gilts gapped lower by just over 10 ticks before slipping to a 90.48 trough, catching up with the modest pressure seen in peers overnight. In the UK, the PM’s meeting with Chinese President Xi generated mixed commentary. A 2028 tender auction attracted strong demand, but had little impact on UK paper.
• Italy sold EUR 6.5bln vs exp. EUR 6-6.5bln 2.85% 2031, 3.45% 2036 BTP & EUR 2.0bln vs exp. EUR 1.5-2.0bln 1.468% 2035 CCTeu.
• UK sold GBP 1.25bln 0.125% 2028 Gilt auction via Tender: b/c 3.77x (prev. 3.84x), average yield 3.443% (prev. 3.783%).

Commodities

• Crude benchmarks have steadily moved higher and reached new four-month highs, with Brent Apr’26 climbing above USD 69/bbl as the probability of a US strike on Iran rises. CNN reported late on Wednesday, citing sources, that US President Trump is considering a new large-scale attack on Iran due to a lack of progress on a nuclear deal. More recently, Kpler’s Bakr reported that Trump is not looking for a war, but instead wants a diplomatic win or an “organic” internal uprising.
• Worries over oil and gas production due to the Arctic storm have subsided for now, with Henry Hub futures consolidating below USD 4/MMBtu after peaking at USD 7.43/MMBtu earlier in the week.
• Precious metals continue their surge higher, with spot XAU topping out just shy of USD 5,600/oz, aided by a weaker dollar following the FOMC policy announcement. Alongside gold, spot silver also peaked at a new ATH of USD 120.43/oz but is currently underperforming the yellow metal. This runs contrary to recent trends, where spot silver has typically led gains. UBS notes that reduced inflows into ETFs and net speculative futures positioning on the US COMEX exchange hint at a possible end to the rally in XAG.
• Copper prices surged at the start of Asia-Pac trade, with 3M LME copper breaking its prior ATH of USD 13.41k/t to reach a new peak of USD 14.12k/t. Despite the lack of a clear near-term driver, expectations for stronger US growth and increased build-out of AI infrastructure remain key supports for the red metal. This move also comes ahead of China’s Lunar New Year holiday, prompting the usual front-loading of copper and other metals ahead of the festive period.
• US Treasury Secretary Bessent said increased Venezuelan crude oil supply means lower fuel prices and proceeds from the sale of Venezuelan oil will return to Venezuelans.
• US is handing over a seized oil tanker to Venezuela, according to US officials.

Geopolitics: Ukraine

• Russian Kremlin spokesperson Peskov does not comment on reported of a energy infrastructure ceasefire between Russia and Ukraine.
• Russia's Kremlin said they're still waiting for the US response on Putin's offer to extend limits in expiring nuclear treaty.

Geopolitics: Middle East

• Kpler's Bakr, on Iran, writes "What I’m hearing: Trump isn’t looking for war. He wants a diplomatic win, or an “organic” internal uprising that forces change from within.".
• Sources from Arab TV report that disputes are still ongoing between Egypt and Israel regarding the number of people crossing through the Rafah in both direction on a daily basis.
• EU's top diplomat said the EU will likely agree on placing sanctions on Iran's IRGC, AP's Gambrell reported.
• Iran's representative to the UN said Iran informs the Council it faces a clear US threat to use force against it, while the Iranian envoy said Washington will bear responsibility for any uncontrolled consequences resulting from any acts of aggression.
• CNN sources say US President Trump is considering a new large-scale strike on Iran as no progress has been made in nuclear talks, although he has not yet made a final decision on a new major military strike against Iran. Trump's military options include airstrikes and targeting of Iranian leaders and security officials.
• BofA card spending, week to January 24th: +6.6% Y/Y (prev. 4.6% Y/Y). Spending growth grew in groceries and general merchandise, indicative of stockpiling before the Winter storm.
• Turkey said it has foiled an Iranian intelligence plot at US' Incirlik base.

Geopolitics: Others

• Sources from Arab TV report that disputes are still ongoing between Egypt and Israel regarding the number of people crossing through the Rafah in both direction on a daily basis.
• Denmark's Foreign Minister after his meeting in Washington said he's more optimistic on Greenland compared to a week ago. Plan to hold further meetings. Back on track with the US on Greenland.

US Event Calendar

• 8:30 am: United States Jan 24 Initial Jobless Claims, est. 205k, prior 200k
• 8:30 am: United States Jan 17 Continuing Claims, est. 1850k, prior 1849k
• 8:30 am: United States Nov Trade Balance, est. -44b, prior -29.4b
• 10:00 am: United States Nov Factory Orders, est. 1.6%, prior -1.3%
• 10:00 am: United States Nov F Durable Goods Orders, prior 5.3%
• 10:00 am: United States Nov F Durables Ex Transportation, prior 0.5%
• 10:00 am: United States Nov F Wholesale Inventories MoM, est. 0.2%, prior 0.2%

DB's Jim Reid concludes the overnight wrap

Yesterday was a rare occasion when both the latest Fed decision and a slew of Mag-7 results failed to materially move markets, with a pause by the FOMC leaving bonds and equities little changed while mixed results from Microsoft and Meta have left equity futures with marginal gains overnight. Precious metals continued to deliver the most eye-catching moves, with gold (+4.86%) yesterday posting its best day since the early weeks of the Covid pandemic and moving up another 2.41% overnight and above $5,500/oz as I type. Elsewhere Polymarket's probability of a US government shutdown has sunk to 44% in the last couple of hours from a peak of 80% yesterday as the NYT has reported overnight that a deal between Democrats and Republican has been potentially sketched out. We will wait to see how that develops.

Starting with the Fed, and as widely expected the FOMC kept rates on hold at 3.50-3.75%. Governors Miran and Waller dissented in favor of a 25bps cut but there was “broad support” for keeping rates steady according to Chair Powell, who said the Committee was “well positioned” after delivering 75bps of rate cuts in late 2025. The pause came amid a more upbeat tone on the economy, with the statement noting the “solid pace” of economic activity and “some signs of stabilization” in the unemployment rate. Powell emphasised the “clear improvement” in the economic outlook since the last meeting, but any hawkish read-across was offset by a more sanguine tone on inflation. The Chair suggested that services disinflation was continuing, with most of the current inflation overshoot coming due to tariffs, the effect of which is expected to peak around the “middle quarters of the year”.

Powell offered little near-term guidance but suggested the next move is likely to be a cut, noting that “it isn’t anybody’s base case right now the next move will be a rate hike”. Our economists see the Powell-led Fed as having now delivered its last rate cut and, more broadly, they think risks around their expectation of one rate cut this year in September have become more balanced. See their full reaction here. Away from policy, Powell mostly deflected questions on the Lisa Cook hearing and whether he’d stay on as Governor after his term ends in May, while reiterating that he was “strongly committed to (Fed independence) and so are my colleagues”.

Bonds and equities saw muted post-FOMC reactions. Both 2yr (-0.2bps at 3.57%) and 10yr (-0.1bps at 4.24%) Treasury yields were little changed by the close, having been just over a basis point higher pre-FOMC. 10yr and 30yr US yields are +2.4bps and +3.2bps higher this morning though. Fed funds futures continue to price 47bps of easing by December (+0.2bps on the day). The S&P 500 (-0.01%) was also essentially unchanged at 6,978, after reaching the 7,000 level intra-day for the first time earlier in the session. The NASDAQ (+0.02%) and the Mag-7 (+0.04%) were steady as well, while the small cap Russell 2000 (-0.49%) retreated.

After the market close, we then received a mixed set of Mag-7 releases from Microsoft, Meta and Tesla. Microsoft’s shares slumped by around -6% after-hours despite a modest earnings beat, as the software giant only just met elevated cloud revenue growth expectations (at +38%) and saw higher-than-expected quarterly CAPEX outlays ($37.5bn vs $36.2bn est.). By contrast, Meta surged by more than +6% after-hours as it projected stronger ad-driven sales for the current quarter ($53.5-$56.5bn vs $51.3bn est.) and guided for stronger CAPEX in 2026 as a whole ($115-135bn vs $110.6bn est.). Meanwhile, Tesla’s shares gained about +2% in post-market trading after delivering a decent earnings beat and laying out plans to invest $20bn this year to streamline its EV lineup and expand work on robotics and AI. Those results have largely offset each other as far as equity futures are concerned with those tied to the S&P 500 (+0.11%) and NASDAQ 100 (+0.26%) trading slightly higher. We next have Apple reporting after the close today.  While we won’t get Nvidia’s earnings until late-February, multiple outlets reported that Beijing had approved purchases of its H200 chips for several Chinese companies including Alibaba. So that helped boost Nvidia’s share price, which rose +1.59%.

Before the Fed decision, the dollar also began to stabilise after Treasury Secretary Scott Bessent reiterated the “strong dollar policy” a day after Trump had seemed more relaxed about its direction. That came in a CNBC appearance, where he said that the US “always has a strong dollar policy, but a strong dollar policy means setting the right fundamentals”. He also commented that the US was “absolutely not” intervening in FX markets, which helped drive a dollar rebound against several other currencies. The dollar did give up some of its rebound later on, in part after Powell said that questions on the recent weakening in the dollar were in the purview of the Treasury not the Fed. Still, the euro was down -0.72% to $1.1954 by the close, with the Japanese yen weakening -0.78% to 153.41 per dollar. Both are back up around a third of a percent higher this morning.

Otherwise, oil prices saw further gains after Trump posted that a “massive Armada” was heading to Iran, and that time was “running out” for Iran to make a deal with the US. Moreover, he said the next US attack would be “far worse” than the strikes last June if Iran did not reach a deal. In response, Iran’s country mission to the UN said that it was ready to correspond with the US, but “if pushed” it would “defend itself and respond like never before.” And yesterday evening, CNN reported that Trump is considering a major strike on Iran but had not yet made a final decision. So fears of tensions escalating between the two countries caused oil prices to rise, with Brent (+1.23%) up to its highest since late-September and trading another +1.62% higher this morning at $69.51/bbl. There were even stronger gains for precious metals, with gold (+4.86%) posting its best day since March 2020 and having now seen its largest 8-day gain since the GFC. Gold is up another +2.41% to $5,550/oz as I type. Meanwhile, silver (+4.12%) also closed at a new high of $116.70/oz and is up just over a percent in Asia.

In Europe, there was a risk off tone yesterday, alongside sovereign bonds rallying as speculation mounted about a potential ECB rate cut this year. That followed comments before the open from the ECB’s Kocher, who said they might have to react if the euro kept appreciating, and overnight index swaps are now pricing in a 26% chance of a rate cut by the September meeting, from 16% before the comments. That helped to push yields lower across the continent, with those on 10yr bunds (-1.7bps), OATs (-0.9bps) and BTPs (-0.4bps) all falling back. Moreover, front-end yields led the declines as investors priced in a growing chance of a rate cut, with the 2yr German yield down -2.2bps.
Elsewhere in Europe, equities largely reversed their gains from the first two days of the week, with the STOXX 600 down -0.75%. Luxury goods were a big underperformer, led by a steep fall in LVMH (-7.89%) after the company’s earnings disappointed the previous evening, which meant the CAC 40 (-1.06%) saw one of the biggest falls.

Finally, the Bank of Canada held its policy rate at 2.25% yesterday, as expected. Governor Macklem kept their options open, saying that “elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate.” But markets are still pricing in a rate hike as most likely by year-end, which is priced in as a 42% probability.

In Asia, the KOSPI (+1.32%) is leading the way again, followed by the Hang Seng (+0.57%) and the Nikkei (+0.31%). Other markets are fairly close to flat.

To the day ahead, data releases include the US November trade balance, factory orders and initial jobless claims, Italy’s November industrial sales, the Euro Area’s January economic confidence. Central bank events include the Riksbank decision, and the ECB’s Cipollone will be speaking today. Finally, Apple, Visa, Mastercard and Blackstone are among those reporting today.

Tyler Durden Thu, 01/29/2026 - 08:49

'No Hire, No Fire' Economy Exposed As Continuing Jobless Claims At Lowest Since Sept 2024

The number of Americans filing for jobless benefits for the first time decline from 210k (upwardly revised from 200k) to 209k (slightly above the 205k exp), but remaining near those multi-decade lows and showing no signs of labor market stress. Unadjusted claims plunged as the seasonal pain ebbed away...

Source: Bloomberg

Even more impressively, continuing jobless claims tumbled to 1.827 million Americans - the lowest since Sept 2024...

Source: Bloomberg

All of which confirms Powell's labor market "stabilization" view.

Under the hood, we note that despite the improvement in overall continuing claims, the 'Deep Tristate' is seeing the jobless-benefit-receiving population starting to accelerate again (and this is before a potential shutdown)...

Source: Bloomberg

So with jobless claims data showing a 'strong and improving' labor market, while The Conference Board showing a labor market signals 'jobs are hard to get'...

Source: Bloomberg

...is this a classic indicator of the 'no fire, no hire' economy?

Tyler Durden Thu, 01/29/2026 - 08:40

The U.S. goods and services trade deficit increased in November 2025 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $29.2 billion in October (revised) to $56.8 billion in November, as exports decreased and imports increased. The goods deficit increased $27.9 billion in November to $86.9 billion. The services surplus increased $0.3 billion in November to $30.1 billion. Full Text

US Heating Bills Expected To Spike Nationwide As Gas, Electricity Costs Continue To March Higher

As Americans brave a brutal cold snap, households are facing higher heating bills this summer. 

According to a report released last week by the National Energy Assistance Directors Association (NEADA), heating prices are expected to rise by 9.2% in the 2025-2026 winter vs. one year ago.

According to the NEADA analysis, electricity costs are expected to rise $12.2%, or $133 this winter, while gas prices are projected to rise 8.4% or $54. Heating oil costs are expected to remain flat, while propane should be down 1.4%, or $18 this winter. 

Several factors are at play pushing retail electricity prices higher. 

"Higher interest rates have increased the cost of financing power plants and transmission projects. Rising natural gas prices are pushing up electricity generation costs. At the same time, electricity demand is growing rapidly, driven in part by the expansion of data centers," reads the report cited by Fox Business.

"Aging grid infrastructure and regional capacity constraints are adding further system costs," the report continues. "In addition, reduced federal incentives for renewable energy have slowed new clean energy investment."

NEADA notes that more than 210 electric and natural gas utilities have either raise rates or proposed to do so within the next two years, which amounts to roughly $85.5 billion - and continues a trend seen in recent years of average monthly residential electricity bills rising faster than average inflation.

Low and moderate-income households are of course hit the worst, as they spend between 6% and 10% of their income on energy, roughly 3-5x what higher-income households pay. 

Additionally, about one-in-six households are behind on utility bills, with Americans collectively owing about $23 billion to electric and gas utilities. NEADA estimates that up to 4 million households faced utility disconnections last year, an increase of about 500,000 from 2024. -Fox Business

According to the NEADA report, "Even modest rate increases can force families to choose between paying utility bills and covering essentials such as food, rent or medicine."

h/t Capital.news

Tyler Durden Thu, 01/29/2026 - 08:20

SAP Shares Plunge Most Since 2020 As Cloud Backlog Miss Amid AI Worries

SAP SE shares in Europe plunged the most since late 2020, as Wall Street analysts told clients the enterprise software company's 2026 guidance appeared underwhelming relative to elevated expectations.

The 25% growth in the current cloud backlog on a constant-currency basis was not enough to spark investor enthusiasm.

As a result, shares in Frankfurt plunged 11% to 174.88 - the largest intraday decline since Oct. 26, 2020.

Shares are now at their lowest level since mid-2024.

Klein told investors during third-quarter earnings in October that 25% growth would be viewed as a "disappointment."

He has shifted SAP away from traditional on-premise software licenses toward cloud-based subscription offerings. The move was initially applauded by investors and helped propel the stock to a record high last year. More recently, however, the rise of AI-powered programming tools has sparked new concerns about what this new competitive space could mean for enterprise software vendors.

Here is Goldman analyst Sean Johnstone's first take on SAP's earnings and outlook.

SAP (not good enough and not sure call will have done enough to quell CCB debate esp. give ServiceNow NOW was down despite a beat & raise): The debate will be on the topline despite the Q been largely inline with the operating beat driven by lower SBC helped by a low stock price. The CCB number was at best inline but includes adjustments – it needed to be 27% esp. given hype that SAP had closed a whole load of large deals and yet its 26% adjusted for "Large transformational deals with high cloud revenue ramps in outer years and termination for convenience clauses required by law negatively impacted fourth quarter constant currency current cloud backlog growth by approximately 1 percentage point." So CCB was included the adjustment was  26%. On call CFO saying that CCB decel in 2026 will be less than they saw in 2025 that was 400bps but on call not clear in quantum of this years decline. As a function of what they reported in 4Q, current consensus is 100bps decel. TCB – at 30% vs. last years 40% and gap to CCB has shrunk from DD to MSD.

Q4 broadly in-line, small miss Cloud Gross profit missed at 74.6% vs, street 75.2%, Opex is inline with street, SBC is below (driven by low stock price) and drives an operating income & EPS beat and FCF beats by 2%

Guidance: On CCB – no number but said to "slightly decelerate". Street has is circa 24% for 2026  so 100bps decel and debate will be in this enough esp as Cloud revenue guide is 23-25% vs. street at 25% and most expected 24-26%. Cloud and software guide 12-13% street as 13%. on EBIT 11.9-12.3 (street is inline). EBIT growth 14-18% street ai 17%. FCF of circ 10bn vs. street at 9.5bn. Plus E10bn buyback. Net/net the debate is all on the revenue outlook & CCB while EBIT and FCF are broadly unchanged. Given the reaction to ServiceNow that beat would expect SAP to be under pressure. At what level does this get defended /trough 160-170 at 5x recurring…

Commentary from others on Wall Street (courtsey of Bloomberg):

JPMorgan (overweight)

• Given investors' negative sentiment around software sector, growth numbers are ultimately what investors are zoomed in on, "and purely off this we would expect a negative share price reaction," says analyst Toby Ogg

• Guidance for the current cloud backlog to "slightly decelerate in 2026" from the 4Q exit rate implies expectations may drift lower on this metric

• Still, 2026 free cash flow guidance of ~€10b was above expectations

Jefferies (buy)

• The company had implied before that a 25% current cloud backlog growth would be disappointing, and "investors are likely to come to the same conclusion," says analyst Charles Brennan

• One detail worth noting is SAP's customer NPS score declined 3 y/y to 9 versus guidance for a slight increase; while the firm attributes the decline to on-premise clients, for SAP to succeed over medium term it needs to bring customers along the journey

• FX is guided to be a 3.5 percentage point of headwind to FY26 Ebit growth, likely bigger than what consensus is modeling

SAP's miss on current cloud backlog expectations suggests a forward-looking growth problem this year.

Tyler Durden Thu, 01/29/2026 - 07:45

My morning train WFH reads:

• Will Danoff, Fidelity Contrafund’s Legendary Manager Keeps Beating the Market. Now He’s Getting Closer to Passing On the Reins. The legendary manager has taken on two co-managers to help him run the mammoth fund. Just don’t use the word “retirement.” (Barron’s).

• The Next Step on the Bond Ladder: ETFs New funds offer income from bond ladders inside an ETF. Here are the pros and cons for investors. (Morningstar)

• Termites are slowly feasting away at the foundations of the dollar’s dominance. The dollar’s dominance was built on the foundation of America’s many strengths. But like termites eating away at a house’s woodwork, Trump’s dysfunctional policies are eating away at its support and rendering the US currency acutely vulnerable to future shocks. (Financial Times)

• Management Fees as the Anti-Alpha: What’s a management fee? Why are investors using this contractually fixed fee in their endeavor to seek market alpha? (Cash and Carried)

• Stung by Trump, America’s Top Trading Partners Shift Gaze to China: Some U.S. allies are weighing closer ties to Beijing as they seek alternative markets (Wall Street Journal) see also Canadians Are Boycotting US Ski Slopes: Travelers from Canada, long the biggest source of international visitors to the US, have pushed back against the president’s imperialist rhetoric. Winter resorts are feeling the chill. (Businessweek) see also How Canada Became an Enemy: It’s not about trade, it’s about ego. (Paul Krugman)

• OpenAI Wants To Create Biometric Social Network To Kill X’s Bot Problem: OpenAI is quietly building a social network and considering using biometric verification like World’s eyeball scanning orb or Apple’s Face ID to ensure its users are people, not bots. (Forbes)

• Trump is dealing with an immigration mess of his own making: The killing of Alex Pretti on Saturday, coming just two weeks after the shooting death of Renée Good, represents a crisis moment for Trump’s immigration policy. (Washington Post)

• Why Your “Squirrel-Proof” Bird Feeder Never Stood a Chance: You’re handing puzzles to expert problem-solvers. (Slate)

• Minnesota Proved MAGA Wrong: The pushback against ICE exposed a series of mistaken assumptions. (The Atlantic)

• When the World Turned to Color: The Inside Story of The Beatles on Ed Sullivan: There are moments in history that act as permanent markers of “Before” and “After.” The printing press. The atomic bomb. The moon landing. On a cold Sunday night in February 1964, four young men from Liverpool joined that list. In just 12 minutes and 40 seconds of television, they didn’t just play songs; they redrew the cultural map of the Western world. (Beatles Rewind)

Be sure to check out our Masters in Business interview this weekend with Kate Burke, CEO of Allspring Global Investments a global asset manager with more than 600 billion dollars in assets under advisement. She is also a director on the firm’s board. Previously, she was at AllianceBernstein as COO/CFO.

 

Europe’s Top Economies in 2026 by Projected GDP
Source: Visual Capitalist

 

Sign up for our reads-only mailing list here.

 

 

The post 10 Thursday AM Reads appeared first on The Big Picture.

UK Government To Create 'British FBI', Roll Out Nationwide Facial Recognition Cameras

Authored by Chris Summers via The Epoch Times (emphasis ours),

The British Home Secretary unveiled plans in Parliament on Jan. 26 for a new National Police Service (NPS), which is modeled on the FBI and will take over the fight against terrorism and organized crime in the United Kingdom.

Undated image of Home Secretary Shabana Mahmood speaking in the House of Commons in London, England. UK Parliament/PA

At the weekend, Shabana Mahmood described the NPS as a “British FBI” and said it would alleviate the burden on local police forces, allowing them to concentrate on issues such as shoplifting and street robbery.

The NPS will replace the National Crime Agency, which covers England and Wales, but it will also have a UK-wide role.

On Monday, the Home Office published a 106-page White Paper that sets out in detail the new police structure and how it would be supported by state-of-the-art technology.

The document says the government would invest 115 million pounds ($157 million) over the next three years “to enable the rapid and responsible adoption of AI and automation technologies by the police.”

A new National Centre for AI in Policing, known as Police.AI, would be created.

There are also plans to roll out facial recognition cameras nationwide to help police catch wanted criminals on watchlists.

The number of facial recognition camera vehicles would be increased from 10 to 50.

“A hundred years ago, fingerprinting was decried as curtailing our civil liberties, but today we could not imagine policing without it,” Mahmood said.

“I have no doubt that the same will prove true of facial recognition technology in the years to come.”

An undated image of a police officer viewing a camera feed from inside a live facial recognition vehicle at an undisclosed location in England. Andrew Matthews/PA

There is currently no dedicated statute governing police use of facial recognition in England and Wales.

Earlier this month, Eleanor “Nell” Watson, a leading researcher and adviser on artificial intelligence ethics and transparency, criticized the increased deployment of surveillance technology.

“The UK is constructing infrastructure for a surveillance society while telling itself it is merely catching criminals,” she told The Epoch Times via email.

Mahmood also announced plans to scrap the existing 43 police constabularies in England and Wales, which would be reorganized into a dozen regional forces.

“Policing is not broken, as some might have us believe,” she told the House of Commons on Monday, “Last year, the police made over three-quarters of a million arrests, five percent more than the year before.”

She said knife crime was down and murder rates in London were at their lowest recorded level.

‘Epidemic of Everyday Crime’

“However, across the country, things feel very different. Communities are facing an epidemic of everyday crime that all too often seems to go unpunished, and criminals know it,” Mahmood said. “Theft has risen by 72 percent since 2010, phone theft is up 58 percent.”

The current 43 police forces in England and Wales were set up in 1974, but Mahmood said the world has changed dramatically.

“Criminals are operating online and across borders with greater sophistication than ever before, be they drug smugglers, people traffickers or child sexual abusers,” Mahmood said.

“The world has changed dramatically since policing was last fundamentally reformed over 50 years ago. Policing remains the last great unreformed public service.”

There were plans to merge police forces 20 years ago, but the idea was dropped by the Labour government of then-Prime Minister Tony Blair.

Labour won a general election in Britain last year, and Mahmood was installed as home secretary, tasked with sorting out Britain’s police and prisons.

“Consolidating the current model will make the police more cost-efficient, giving the taxpayer more value for money, while also ensuring a less fragmented system that will better serve the public and make them safer,” the Home Office said in the paper.

Criticism of ‘Mega-Forces’

The opposition Conservatives’ shadow home secretary, Chris Philp, criticized the plan to reduce the number of police forces from 43 to 12 and said it would create forces that would be too big.

“Such huge forces will be remote from the communities they serve. Resources will be drawn away from villages and towns towards large cities,” Philp said.

He added that the Metropolitan Police, Britain’s largest police force, had the worst crime-solving rates.

“That goes to show that large scale does not automatically deliver better results, and therefore we will oppose the mandated merger of county forces into remote regional mega-forces,” Philp said.

“Over the weekend, the Home Secretary was trailing this proposal as a British FBI,” Scottish National Party (SNP) MP Pete Wishart said.

“While it might indeed be their FBI, British, it most definitely is not, as it applies only to England and Wales.”

“In Scotland, we are immensely proud of our culture and ethos of policing by consent and the fact that we have the lowest crime rates in the whole of the UK. The last thing we want is this creeping Americanization,” Wishart added and demanded to know what powers the NPS would have in Scotland.

Mahmood said NPS would cover the whole of the UK.

“In England and Wales, it will have full operational powers and will be able to carry out its law enforcement activities,” she said.

“But in Scotland and Northern Ireland, it will carry out operations only with the agreement of the legally designated authority.”

Tyler Durden Thu, 01/29/2026 - 02:00

Why The US Was Right To Leave The WHO

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

Commentary

The United States has pulled its membership in the World Health Organization (WHO), and many other nations are rethinking their participation. Of course, this could change with some future administration. The institution itself is not going anywhere. This is why it is crucial to understand the case for why the United States needed to pull out and cut all funding.

Illustration by The Epoch Times, Shutterstock

Get out and stay out.

It’s also critically important that other nations join us and leave this organization. To top it all off, the WHO has become a pillar of duplicity even now.

Over the weekend, WHO head Tedros Adhanom Ghebreyesus said, “While WHO recommended the use of masks, physical distancing and vaccines, WHO did not recommend governments to mandate the use of masks or vaccines and never recommended lockdowns.”

This claim is easily refuted.

The evidence that WHO backed lockdowns begins on Jan. 29, 2020, when Tedros praised the Chinese Communist Party and Xi Jinping in particular to the skies for its “amazing” response to COVID-19, which included welding people inside their homes and arresting and likely killing people for disobeying the authorities.

Nothing like this had happened in the modern era in any country. The WHO was completely on board.

A few weeks following this celebratory news conference, the WHO organized a trip to Wuhan and several other cities in China. This junket involved the UK, EU, and the United States. This trip included Clifford Lane, a top aide to Dr. Anthony Fauci, and several other Americans. On the way back from this multi-city trip, they drafted the report that praised China’s response to the virus in terms that contradict every principle of public health.

This is before there were any lockdowns in the United States or the UK.

This Feb. 28, 2020, report, is still on the WHO website:

“Achieving China’s exceptional coverage with and adherence to these containment measures has only been possible due to the deep commitment of the Chinese people to collective action in the face of this common threat. At a community level this is reflected in the remarkable solidarity of provinces and cities in support of the most vulnerable populations and communities.”

It goes on:

“At the individual level, the Chinese people have reacted to this outbreak with courage and conviction. They have accepted and adhered to the starkest of containment measures—whether the suspension of public gatherings, the month-long ‘stay at home’ advisories or prohibitions on travel. Throughout an intensive 9-days of site visits across China, in frank discussions from the level of local community mobilizers and frontline health care providers to top scientists, the Joint Mission was struck by the sincerity and dedication that each brings to this COVID-19 response.”

Or as WHO spokesman Dr. Bruce Aylward said following his Wuhan mission in February 2020, “Copy China’s response to Covid!” This exhortation was praised by the Chinese Communist Party. Incredibly, the WHO was so influential on the world that 194 nations followed the model and did exactly that. They issued stay-at-home orders and shut business, churches, and schools.

Not only did the WHO support lockdowns, it urged them on the entire world in the name of public health, as a method of following the Chinese plan. Indeed, this report was the basis of the lockdowns that came to the United States and UK. It provided the cover necessary for imposing this unprecedented violation of rights.

When the lockdowns next came to Northern Italy, the WHO celebrated those, too. A spokesman for the WHO and director of WHO Europe, Hans Kluge expressed his “full support for the measures adopted by Italy to address the novel coronavirus emergency and the World Health Organization’s willingness to offer every means of full cooperation!”

The lockdowns came to the United States and most nations in mid-March 2020. Already the disaster was unfolding all around us within a week or two. A month later, the WHO urged nations not to open up too soon. They sent out communications demanding universal track-and-trace policies with testing, full protective equipment, social distancing, and a massive propaganda campaign of fear and loathing.

In other words, while the WHO recognized that people were going crazy in lockdowns and would not stand much more of this, it refused to recognize the need for freedom but rather doubled down on tyranny, surveillance, and control as the right way to manage a virus.

A month later, the WHO warned against lifting lockdowns because this would only result in more infections and danger. It posted on social media: “Further guidance was published that outlines the key questions countries should ask prior to the lifting of lockdowns: Is the epidemic under control? Is the health system able to cope with a resurgence of cases that may arise after relaxing certain measures?”

Later that month, the WHO said lockdowns are actually wonderful because they address the problem of climate change. “The pandemic has given us a glimpse of what our world could look like if we took the bold steps that are needed to curb #ClimateChange and #AirPollution,” it quoted Tedros as saying, in a social media post.

By mid-summer, the WHO said that lockdowns were great but not enough, and that all government should be engaged in universal contract tracing to control the virus that everyone would get anyway.

By October 2020 and following the Great Barrington Declaration, the WHO once again endorsed lockdowns. “We recognize that at certain points, some countries have had no choice but to issue Stay-At-Home orders and other lockdown measures, to buy time,” the WHO posted, quoting Tedros, on Oct. 12, 2020.

This was not accidental messaging, but rather stated WHO policy throughout.

The moment that the vaccine was rolled out, following the November 2020 election, the WHO actually changed its definition of herd immunity to exclude the possibility of natural immunity. It previously said that herd immunity is reached through vaccination or exposure from infection. The WHO suddenly eliminated the second point and said that vaccines are the only path.

What this note at the World Health Organization did was delete what amounts to the entire million-year history of humankind in its delicate dance with pathogens. You could only gather from this that all of us are nothing but blank and unimprovable slates on which the pharmaceutical industry writes its signature.

In addition, the editorial change at WHO ignored and even wiped out a century of medical advances in virology, immunology, and epidemiology. It was thoroughly unscientific—shilling for the vaccine industry in exactly the way that the conspiracy theorists say that the WHO has been doing since the beginning.

By the time that the virus weakened to become no more dangerous than a cold, the WHO was still at it. “We’re concerned that a narrative has taken hold in some countries that because of the vaccine, and because of Omicron’s high transmissibility and lower severity, preventing transmission is no longer possible, and no longer necessary. Nothing could be further from the truth,” it stated.

This was worse than bad health and policy advice. The WHO allowed itself to be used as a handmaiden of totalitarian controls across the globe. Many nations had trusted this organization and followed advice. This was a disaster for health and for freedom. The United States simply cannot be a member of such an organization.

The WHO once served a valuable function, and those functions are still necessary. That said, each nation alone needs to embrace its own health sovereignty based on its own needs. There is, in short, no such thing as global or world health. This is why every nation should leave the WHO, which proved itself to be completely compromised by its celebration of the CCP and then its promotion of a dangerous product. It has no credibility remaining to its name.

Tyler Durden Wed, 01/28/2026 - 23:25

New Footage Appears To Show Alex Pretti Spit At ICE, Break SUV Tail Light In Prior Minneapolis Confrontation

The killing of ICU nurse Alex Pretti in Minneapolis last Saturday sparked national outrage - particularly when it comes to the 2nd Amendment and his right to carry while protesting. The incident resulted in two federal agents involved in the shooting being placed on leave, and the ouster of US border patrol chief Gregory Bovino as the face of the Trump administration's mass deportation drive.

While the circumstances of his death are still under investigation - many believe this  gun went off after an agent took it off his body, spooking the shooter or shooters - he was known to federal authorities, and had suffered a broken rib during a violent confrontation with agents about a week before his death, CNN reported Tuesday.

Now, new footage appears to show Pretti armed and spitting at ICE agents before he smashes the taillights of their black SUV during a wild confrontation roughly a week before his death. 

Screenshot via The News Movement

The video, verified by the BBC, captures what appears to be Pretti screaming at federal agents while they were driving away during a Jan. 13 protest. As their SUV leaves, he kicks the taillight - breaking it, causing agents to exit the vehicle and tackle him to the ground. 

The agents continue to hold him down until he retreats and joins a crowd shouting at agents, as his gun is visibly tucked into the back of his pants. 

Screenshot via The News Movement

Watch:

Video of Peaceful Alex Pretti helping old ladies cross the street and doing volunteer work at the orphanage
OR
Swearing like a drunken sailor, spitting and destroying property pic.twitter.com/FChuxZ7Zwy

— Jim Hanson (@JimHansonDC) January 29, 2026

Prior to the protests, Pretti's parents specifically warned him against engaging. 

"We had this discussion with him two weeks ago or so, you know, that go ahead and protest, but do not engage, do not do anything stupid, basically," said Michael Pretti. "And he said he knows that. He knew that."

While this changes nothing about an American's 2nd Amendment rights, it certainly changes the narrative insofar as whether ICE agents identified Pretti prior to his death and considered him to have an elevated risk profile. 

So the “hero nurse” was actually a crazy psycho spitting on ICE agents and attacking their vehicle. Guy should have been charged for this. Might still be alive if he had been. He was looking for trouble for weeks. https://t.co/owRNNIvTRD

— Clay Travis (@ClayTravis) January 29, 2026

Well this aged incredibly poorly https://t.co/TBRPcVurG6

— Ian Miller (@ianmSC) January 28, 2026

Tyler Durden Wed, 01/28/2026 - 23:00