Good Afternoon. Nothing like starting the week with a bit policy turbulence. Washington debates a 10% credit-card rate cap, and markets are repricing something harder to model: confidence in institutions. Add in a jobless-recovery warning, and you’ve got growth with a suspicious lack of help wanted signs. Let’s get into it.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Gold Hits $4,600+ as Markets Price a New Risk Premium: “Fed Independence”

The News: Markets steadied after an early tumble on Monday, Jan. 12, but the bigger move was in havens: gold rose about 2.4% to ~$4,617/oz after touching a record ~$4,627, while the dollar index fell ~0.37% to 98.87 as investors digested Fed Chair Jerome Powell’s claim that the Trump administration has threatened a criminal indictment tied to his Senate testimony on the Fed’s $2.5B headquarters renovation. Overall, stocks ended mixed.

Why It Matters: This is what an “institutional risk premium” looks like: when investors worry the Fed could be pressured (or perceived as pressured), they tend to demand more compensation for holding dollars and long-duration assets, hence the softer greenback and the sprint into gold.

What to Watch: Whether the DOJ/Fed clash escalates or cools, because markets react quickly when headlines start changing the perceived rules of the game. Also watch the dollar and real yields: if the greenback keeps slipping while gold stays pinned near records, that’s a sign the market is treating this as more than a one-day event.
Source: wsj.com

2. Banks Head Into Earnings Week as Trump Floats a 10% Card APR Cap

The News: U.S. bank stocks slid Monday after President Trump proposed a one-year 10% cap on credit-card interest rates, set to start Jan. 20, spooking investors just as the big lenders head into Q4 earnings. In early trading, major banks fell roughly 2%–4% (including JPMorgan, Citi, Bank of America, and Wells Fargo), while card-heavy names like Capital One and Synchrony dropped more sharply. Analysts noted the average U.S. credit-card APR is around 21%, making a 10% cap a major hit to the economics of revolving credit and many also questioned whether the proposal is feasible without Congress.

Why It Matters: If a cap like this ever became real policy, it would likely mean less credit availability, tighter underwriting, and more borrowers pushed toward alternatives, BNPL lenders even ticked up on the idea they could catch displaced demand. For investors, it lands at the worst possible time: banks are about to tell the market how 2026 looks, and now the outlook includes a new “political rate risk” that doesn’t move with the Fed. Wall Street can hedge risks; it has a harder time hedging Truth Social.

What to Watch: Management commentary this week for how seriously banks treat the proposal and whether they frame it as “headline noise” or “planning scenario.” Earnings start with JPMorgan on Tuesday, Jan. 13, then Bank of America/Citi/Wells on Wednesday, and Goldman/Morgan Stanley on Thursday. Also watch Washington’s next move: if this shifts from a floated idea to legislative language, the market’s next question won’t be EPS, it’ll be which business models still work at 10%.
Source: bbc.com

3. Alphabet Joins the $4 Trillion Club

The News: Alphabet briefly crossed a $4 trillion market cap on Monday, Jan. 12, becoming the fourth company to hit that milestone, after news of a multi-year deal for Apple to use Google’s Gemini models in upcoming Apple devices. Shares hit a record $334.04 intraday, and Alphabet overtook Apple as the world’s second-most valuable company for the first time since 2019.

Why It Matters: This is the clearest “AI full-stack” vote yet: Alphabet isn’t just selling models, it’s selling distribution (Android/Search), infrastructure (Cloud), and increasingly the picks-and-shovels (TPUs). That matters because the Apple partnership effectively turns Google into a behind-the-scenes AI supplier for one of the largest device ecosystems on earth, while reinforcing Alphabet’s narrative that it can monetize AI without cannibalizing its ad engine.

What to Watch: Any detail on economics (revenue share, cloud spend, scope of Siri integration), and whether regulators take a harder look as the Apple/Google relationship deepens. Next near-term catalyst: Alphabet reports Q4 and full-year 2025 results on Wednesday, Feb. 4, 2026 (4:30pm ET call), where investors will want proof that AI-driven capex is translating into durable Cloud and ad growth.
Source: reuters.com

4. Siri Gets a Gemini Brain

The News: Apple confirmed Monday, Jan. 12 that it will use Google’s Gemini models to power the next generation of Siri, formalizing a multi-year partnership between two longtime rivals. Prior reporting said the deal is worth about $1 billion a year, and that Apple will deploy a custom 1.2 trillion-parameter Gemini model, roughly 8× larger than Apple’s current ~150B-parameter cloud system. The upgraded Siri is expected to arrive with iOS 26.4 in March or April 2026, adding more contextual and multi-step task capabilities

Why It Matters: This is a big win for Google: it turns Gemini into a behind-the-scenes engine for one of the world’s largest device ecosystems, and it helped propel Alphabet to a $4 trillion valuation milestone the same day. For Apple, it’s a pragmatic admission that the AI frontier is moving fast and that “build everything in-house” is hard when users want the new Siri yesterday. Siri is getting smarter by borrowing Google’s homework, then turning it in on Apple letterhead.

What to Watch: The implementation details, especially the privacy architecture. Apple and Google said Apple Intelligence will continue to run on-device and on Apple Private Cloud Compute, while maintaining Apple’s privacy standards (i.e., no user data shared with Google for training). Also watch economics and scope: whether this expands beyond Siri into broader “Apple Foundation Models” features, and how regulators view a deeper Apple, Google tie-up as AI becomes core infrastructure rather than an add-on.
Source: theverge.com

5. Goldman’s 2026 Warning: “Jobless Recovery”

The News: Goldman Sachs is flagging a plausible “jobless recovery” scenario for 2026, solid GDP growth, but weak hiring, after December’s jobs report showed just +50,000 payrolls (with Oct/Nov revised down a combined 76,000). The soft December print capped a slow year: the U.S. added 584,000 jobs in 2025, the weakest non-recession annual gain in decades, even as overall activity stayed resilient. Goldman’s broader macro view still assumes the U.S. can grow around the mid-2% range in 2026, supported by easier financial conditions and policy tailwinds, but with labor demand more fragile than the GDP headline suggests.

Why It Matters: “Jobless growth” is a market-friendly, voter-unfriendly combo: earnings can hold up if productivity rises and companies restrain headcount, but workers feel it through fewer openings, slower wage leverage, and a tougher time switching jobs. It also changes the Fed’s calculus, if hiring stays soft without a spike in layoffs, policymakers may be slower to cut early but more willing to cut later if the labor market keeps losing momentum. In other words, the economy can look “fine” while the job market feels like it’s still buffering.

What to Watch: Job openings, quits, and layoff chatter (the “demand for workers” dashboard) and whether productivity remains strong enough to justify low hiring without tipping into broader cuts. Also watch how quickly markets reprice the Fed path, Goldman and peers have been pushing expected cuts later into 2026 after the latest data. If we keep getting “low-hire, low-fire” prints, expect the next fight to be less about recession risk and more about who actually benefits from growth.
Source: finance.yahoo.com

1. Hedge Funds Rush to Venezuela

The News: Investors are scrambling to position for a post-Maduro Venezuela, with hedge funds scouting distressed Venezuelan/PDVSA bonds, arbitration claims, and reconstruction plays. One adviser said he’s organizing a March investor trip to Caracas and pegged potential rebuild opportunities at up to $500B over a decade, with demand reportedly far higher than past delegations to other post-conflict markets.

Why It Matters: This is what “regime change” looks like in markets: first comes the price action, then comes the PowerPoint, then comes the licensing paperwork. Venezuelan debt has already rallied hard (still distressed, just less hopeless), but the real value, oil, infrastructure, payments, ports, depends on legal clarity and who Washington allows to do business. For investors, the risk is that the easiest money is already made in the first repricing, while the slow money requires years of rule-of-law rebuilding. Caracas may be open for business, your compliance department may disagree.

What to Watch: OFAC licensing and any sanctions roadmap first: Reuters reports a major creditor group has been seeking U.S. authorization to begin restructuring talks, and without that green light, a lot of “deal flow” stays theoretical.
Source: wsj.com

2. Airbus Ships 793 Jets in 2025

The News: Europe’s Airbus delivered 793 commercial aircraft in 2025 to 91 customers, up 4% year over year, narrowly clearing its trimmed target of about 790 after it cut guidance from 820 late in the year due to supplier quality issues. It logged 1,000 gross orders and 889 net orders, pushing its backlog to a record 8,754 aircraft.

Why It Matters: In a market where airlines are desperate for capacity (and customers are desperate for fewer “equipment swaps”), backlog quality and steady output are competitive weapons. Airbus’ ability to hit a revised target despite engines and supplier hiccups reinforces the idea that it has the cleaner production rhythm. For Boeing, which appears to be on track for roughly ~600 deliveries in 2025 after a rough 348 in 2024, the recovery is real but the gap also shows how hard it is to win back share when the other guy is still shipping planes.

What to Watch: Whether engine bottlenecks ease enough to convert “gliders” into revenue and whether Airbus can lift narrowbody output without creating fresh quality headaches. Also watch Boeing’s final 2025 delivery tally and 2026 production guidance for signs the catch-up phase can become a sustained cadence.
Source: airbus.com

3. Europe’s Defense Rally Hits Fresh Highs

The News: European defense stocks pushed to new records on Monday, Jan. 12, as the Greenland standoff and expectations of much higher defense spending kept investors crowding into the sector. Reuters flagged a broader “safe-haven” bid tied to Trump’s renewed Greenland threats, while defense names like BAE Systems hit fresh highs in London. The rally is also riding policy oxygen: Trump has called for a $1.5 trillion U.S. defense budget for FY2027 (vs. $901B approved for 2026), and Europe is debating faster rearmament as tensions rise.

Why It Matters: Defense has turned into the market’s “structural” trade: when geopolitics stays hot, order books get stickier and budgets get harder to cut. Europe’s case is reinforced by NATO’s Hague pledge to move toward 5% of GDP on defense-and-security-related spending by 2035 a target that effectively tells contractors the demand curve isn’t a one-quarter story. Nothing says “visibility” like a multi-year procurement cycle backed by existential dread.

What to Watch: Next week’s diplomacy around Greenland for any shift from rhetoric to concrete moves, and watch whether the U.S. budget proposal gains traction in Congress, because “proposed” spending and “appropriated” spending live in very different places.
Source: reuters.com

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