Good morning investors! The market rebounded yesterday after a break.
Today we cover:
Global forecast upgraded
Big earnings
Trum'p’s new healthcare plan
📊 Economy and News
Wells Fargo Upgrades 2026 Global Growth Forecast to 3.0%
Wells Fargo analysts have raised their 2026 global economic growth forecast to 3.0% from 2.8%, citing resilience in the world economy and reduced trade policy uncertainty. They project 2025 growth at 3.1%.
The upgrade reflects improved outlooks for the U.S., China, and India. Easing trade tensions and shifts toward accommodative fiscal and monetary policies are expected to support global activity.
China shows signs of stabilization after challenges in consumer spending and housing, though it will likely drag on 2026 growth relative to prior years.
G10 central banks have limited room for further rate cuts after 2025 easing. Only the Fed, Bank of England, and Norges Bank are anticipated to cut rates in 2026, with more action in emerging markets.
Expected Fed cuts and softening U.S. trends may weaken the dollar further in early 2026, though it could rebound later as easing ends. Emerging market currencies are seen as most vulnerable.
Global hits:
India, EU close in on trade pact as US trade talks drag on.
Canadian home sales fall 1.9% in 2025 on tariff shock.
China’s growth set to slow to 4.5% in 2026, raising pressure on policymakers.
US-Taiwan pact: The U.S. and Taiwan have reached a trade agreement to build chips and chip factories on American soil. Taiwanese chip and technology companies will invest at least $250 billion in production capacity in the U.S.
The U.S. will limit “reciprocal” tariffs on Taiwan to 15%, and commit to no reciprocal tariffs on generic pharmaceuticals, their ingredients, aircraft components and some natural resources.
Reminder: US 30-year fixed-rate mortgage drops to near 3-1/2-year low of 6.06%. In other news, US import prices increase from September to November.
Silver fell after the US did not set tariffs on critical metals. On the other hand, oil fell 4% due to a lack of U.S. action in Iran.
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📈 Stocks
S&P 500 6,944.47 (+0.26%)
DJIA 49,442.44 (+0.60%)
NASDAQ 23,530.02 (+0.25%)
BRENT CRUDE 63.54 (-3.97%)
* Prices as of Jan 16th, 12:20 AM UTC
Big Earnings Are Here
Goldman Sachs reported a strong rise in fourth-quarter profit, with net earnings attributable to common shareholders reaching $4.38 billion, or $14.01 per share, compared to $3.92 billion, or $11.95 per share, a year earlier. The increase was driven by robust equity trading revenue of $4.31 billion (up from $3.45 billion), a 12.5% rise in fixed-income, currencies, and commodities trading to $3.11 billion, and a 25% surge in investment banking fees to $2.58 billion amid a booming M&A market. Additional boosts came from a one-time gain related to exiting its Apple credit card partnership (including a $0.46 per share benefit and a $2.48 billion release of loan loss reserves). The bank maintained its top position in global M&A for 2025, advising on $1.48 trillion in deals.
Morgan Stanley reported a significant increase in fourth-quarter profit, reaching $4.40 billion, or $2.68 per share, up from $3.71 billion, or $2.22 per share, a year earlier. The surge was primarily driven by a revival in investment banking, with revenues climbing to $2.41 billion from $1.64 billion, including a 45% jump in advisory fees to $1.13 billion and a near-93% rise in debt underwriting to $785 million. Strong equities trading and a robust M&A environment—fueled by AI enthusiasm, Fed rate cuts, and large deals—contributed to the performance, mirroring gains seen across Wall Street peers amid global M&A volumes exceeding $5.1 trillion in 2025. CEO Ted Pick highlighted accelerated investment banking activity and resilient global markets.
Taiwan Semiconductor Manufacturing Company reported a record fourth-quarter performance, with net income surging 35% year-over-year to NT$505.74 billion ($16.3 billion), exceeding analyst expectations of NT$478.37 billion, while revenue rose 20.5% to over NT$1.046 trillion ($33.73 billion). The strong results were driven by robust demand for advanced AI chips, with high-performance computing (including AI) accounting for 55% of sales and chips at 7-nanometer or smaller comprising 77% of wafer revenue. TSMC guided for first-quarter 2026 revenue of $34.6–$35.8 billion (up 38% year-over-year at midpoint) and plans capital expenditure of $52–$56 billion in 2026 to ramp up 2nm production and global expansions, particularly in Arizona, amid ongoing AI server growth despite potential risks from tariffs and memory shortages.
BlackRock surpassed $14 trillion in AUM for the first time, driven by record $342 billion quarterly net inflows. Adjusted EPS beat estimates at $13.16 vs. $12.39 expected, prompting a 10% dividend increase. Growth stemmed from strong inflows into iShares ETFs and private markets amid institutional repositioning for the 2026 fiscal cycle.
Interesting: OpenAI seeks US hardware partners for expansion into devices and data centers.
Wikipedia parent partners with Amazon, Meta, Perplexity on AI access.
Cloudflare acquires AI data marketplace Human Native.
Surprising: Amazon threatens ‘drastic’ action after Saks bankruptcy, says $475M stake is now worthless. In other news, China just ‘months’ behind U.S. AI models, Google DeepMind CEO says.
💵 Personal Finance
Trump’s New Healthcare Plan
Senate Republicans are blocking Democratic efforts to extend expiring Affordable Care Act (ACA) tax credits, risking premium spikes for millions. President Trump, a longtime ACA opponent, has unveiled his "Great Healthcare Plan" as an alternative, focusing on:
Slashing prescription drug prices and expanding over-the-counter medicines
Reducing premiums via direct subsidies to individuals, funding cost-sharing reductions, and cutting kickbacks
Increasing insurer accountability through plain-English policies, public disclosure of overhead vs. claims ratios, and claim denial rates
Mandating price transparency for Medicare and Medicaid providers
The plan excludes ACA subsidy extensions, which Democrats insist are essential, but a White House official noted it "does not close the door" on them while prioritizing direct aid to Americans over insurers. Trump urged Congress to pass the framework immediately. Insurance stocks (e.g., Oscar Health, UnitedHealthcare) initially dipped but recovered strongly amid hopes subsidies remain negotiable.
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