Good morning investors! The Supreme Court may rule today on tariffs.
Today we cover:
Themes shaping up 2026
Defense stocks jump
Starting 2026 with new goals
📊 Economy and News
JPMorgan analysts, including Joyce Chang, highlight an accelerating shift to an asset-based economy driven by AI investments and wealth gains. Traditional economic indicators are losing relevance as asset prices, liquidity, and financial conditions take center stage.
Key themes for investors in 2026 include:
Widening divide between asset owners and wage earners, amplifying the "K-shaped" recovery.
Sustained AI-driven capital spending, potentially pushing the S&P 500 above 8,000, with tech innovation expanding into biotech, quantum computing, and finance.
Escalating U.S.-China "tech war," making tech advances and commodities new geopolitical flashpoints.
Benefits from prior Trump-era tax changes boosting investment, though labor market slowdown and affordability issues persist.
Uncertainty over Trump's tariffs, pending a potential Supreme Court ruling in H1 2026.
U.S. midterm elections influenced by polarization, paradoxes, and uneven productivity.
Shift in U.S. foreign policy toward transactional, burden-shifting approaches — benefiting emerging markets but challenging Europe.
Rising demand for international diversification and alternative assets beyond stocks, bonds, and cash.
Ongoing influence of the "six Ds": deficits, deregulation, de-population, de-carbonization, de-globalization, and de-dollarization.
Global hits:
India consumer price inflation likely rose to 1.50% in December.
US container imports dropped 5.9% in December on continued China slump. Moreover, Euro zone consumer inflation expectations hold steady.
China inflation hits near three-year high in December as full-year CPI misses target.
Japan November real wages fall at fastest pace since January.
Look here: US third-quarter productivity rises at fastest pace in two years.
UN thinks Trump’s tariffs will slow global growth in 2026.
Fed to cut rates slightly this year, CBO forecasts.
US consumers more concerned about job market in December with job-finding expectations all-time low. Yet, Americans are feeling more optimistic about their future financial situation.
Reminder: Trump signs order withdrawing US from 66 international orgs, including UN bodies. In other news, US mortgage rates inch higher, sending 30-year average to 6.16%. Lastly, Trump signals Fed decision reached in NYT interview.
Also, IRS will accept 2025 tax returns starting January 26.
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📈 Stocks
S&P 500 6,921.46 (+0.0077%)
DJIA 49,266.11 (+0.55%)
NASDAQ 23,480.02 (-0.44%)
BRENT CRUDE 62.71 (+4.59%)
* Prices as of Jan 8th, 12:20 AM UTC
Defense Stocks Surge on Trump's $1.5 Trillion Military Budget Proposal
Global defense stocks rallied Thursday following President Donald Trump's call for a $1.5 trillion U.S. military budget in 2027, a massive increase from the $901 billion for 2026.
In aTruth Social post, Trump described the boost as necessary in "troubled and dangerous times" to build a "'Dream Military' that will keep us SAFE and SECURE, regardless of foe."
The proposal comes amid recent U.S. military actions, including the capture of Venezuelan President Nicolás Maduro on drug-trafficking charges, assertions of control over Venezuelan oil, and renewed rhetoric on acquiring Greenland.
U.S. shares rose sharply: Northrop Grumman up ~8%, Lockheed Martin ~8%, RTX ~5%, and Kratos Defense ~12%. European indexes gained ~1%, with companies like Renk and Leonardo leading early before paring gains. Asian firms, including Mitsubishi Heavy, also advanced modestly.
Analysts note the surge builds on geopolitical tensions but highlight challenges in funding and absorbing such a rapid increase.
Interesting: Trump threatens to ban institutional investors from buying single-family homes.
Meta faces China probe over acquisition of AI agent startup Manus.
Trump says Venezuela will purchase American products with revenue from oil deal.
Surprising: GM takes $7 billion hit as cost of backing away from EVs. Elsewhere, Samsung Electronics estimates nearly three-fold profit surge as memory prices skyrocket. In other news, Trump instructs ‘representatives’ to buy $200 billion in mortgage bonds, aiming to lower rates.
💵 Personal Finance
Kickstarting Your Financial Success: Setting Goals at the Start of 2026
As the new year begins, it's the perfect time to reflect on your finances and set meaningful goals. With economic uncertainties lingering, taking control through intentional planning can build security and confidence. Experts recommend starting with a review of your current situation—track income, expenses, debts, and savings—to create a realistic foundation.
Use the SMART framework to craft effective goals: Specific, Measurable, Achievable, Relevant, and Time-bound. For example, instead of "save more," aim for "save $5,000 for an emergency fund by December 2026 by automating $417 monthly transfers to a high-yield savings account." This approach breaks big aspirations into actionable steps.
Common priorities for 2026 include building an emergency fund (aim for 3-6 months' expenses), paying down high-interest debt, boosting retirement contributions, or saving for major purchases like a home or vacation. Prioritize based on your values—perhaps debt reduction for peace of mind or retirement for long-term freedom.
To stay on track, automate savings and payments, track progress monthly, and celebrate milestones. Write goals down, share them for accountability, and review quarterly to adjust for life changes.
Financial success isn't about perfection; it's about consistent progress. By setting clear goals now, you'll end 2026 stronger and more prepared for the future.
💰 Be a Better Investor
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