Good morning investors! After a stellar 2025, we’re ready for another great year.
Today we cover:
What to expect this week
Trends shaping this year
BYD beats Tesla
📊 Economy and News
What to Expect This Week
Here’s what to keep an eye on this week:
Monday, January 5
ISM Manufacturing PMI (December)
Tuesday, January 6
S&P Services PMI (December)
Fed speech: Richmond Fed President Tom Barkin
Wednesday, January 7
Fed speech: Governor Michelle Bowman
ADP Private Employment (December)
Other data: Job openings (November), manufacturers’ shipments/inventories/orders (October), ISM Services PMI (December)
Earnings highlights: Constellation Brands (STZ), Albertsons (ACI), Applied Digital (APLD), Cal-Maine Foods (CALM)
Thursday, January 8
Weekly jobless claims
Other data: Consumer credit (November), Q3 productivity/costs, trade deficit (October)
Earnings highlights: TD Synnex (SNX), Simply Good Foods (SMPL), Tilray Brands (TLRY)
Friday, January 9
December Jobs Report (nonfarm payrolls, unemployment)
Other data: Housing starts (September/October), preliminary January consumer sentiment
Markets remain sensitive to Venezuela updates, oil prices, and labor data signals on Fed policy
Global hits:
BofA lifts India 2026 GDP growth forecast to 7.6% on consumption.
Mexico’s remittances fall 5.7% in November, marking eighth monthly decline.
Trump says US is taking control of Venezuela’s oil reserves after the country captures Nicolas Maduro.
Deutsche Bank's 5 Key Themes Shaping Markets in 2026
Deutsche Bank strategist Jim Reid outlines five interconnected themes expected to drive market volatility and performance in 2026:
Trade and Tariffs: Major uncertainty persists, centered on a U.S. Supreme Court ruling on tariffs under the International Emergency Economic Powers Act (IEEPA). Even if struck down, alternative measures like Section 232 tariffs could emerge. Investors are monitoring the USMCA review and U.S.-China truce expiring November 2026, with political pressures likely curbing inflation spikes.
Federal Reserve Changes: A pivotal year with Jerome Powell's term ending in May. Markets anticipate a new chair announcement soon and 57 basis points of rate cuts by year-end. Potential challengers include Kevin Hassett, Kevin Warsh, and Christopher Waller. A Supreme Court case on board member removals adds further intrigue.
Fiscal Policy Stimulus: Renewed focus on expansionary measures, including U.S. "One Big Beautiful Bill Act" and German fiscal support. This follows 2025 bond market turbulence from loose policies, such as U.S. rating downgrades pushing 30-year yields over 5% and sharp rises in U.K., French, and Japanese bonds.
Political Developments: U.S. midterm elections on November 3 are key, with all House seats and one-third of Senate up for grabs. Current odds favor Democrats retaking the House and Republicans holding the Senate, though new Congress starts in 2027, delaying major policy shifts.
Artificial Intelligence Momentum: AI remains a dominant driver, with heavy market concentration in the Magnificent Seven stocks. Any slowdown or bubble signals could erode wealth effects and capex surges, as seen in 2025's sharp NASDAQ drop on competing AI model news.
Reid notes these familiar themes' interactions could amplify volatility across assets.
Reminder: Trump postpones tariff hikes on furniture, kitchen cabinets for a year.
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📈 Stocks
S&P 500 6,858.47 (+0.19%)
DJIA 48,382.39 (+0.66%)
NASDAQ 23,235.63 (-0.027%)
BRENT CRUDE 60.75 (-0.15%)
* Prices as of Jan 4th, 12:20 AM UTC
AI Spending, Strong Earnings, and Fed Rate Cuts Key to US Stock Gains in 2026
The U.S. stock market capped 2025 with a third consecutive year of double-digit gains, the S&P 500 rising over 16% amid AI optimism, Fed rate cuts, and resilient growth despite early volatility from Trump administration tariffs.
For another strong year in 2026, investors say markets will need robust corporate earnings (projected +15% for S&P 500 companies, with broader participation beyond the "Magnificent Seven"), sustained heavy AI infrastructure spending, and a dovish Federal Reserve delivering further rate reductions without triggering recession.
Valuations are already elevated, leaving little room for expansion, so profit growth and confidence in AI returns will be critical.
Strategists' 2026 S&P 500 targets range from 7,400 (+8%) to 8,000 (+17%), with historical bull-market patterns supportive but midterm election uncertainty and U.S.-China relations as potential wildcards.
BYD beats Tesla: BYD remained the leader in EV sales, delivering more than 4.54 million vehicles for 2025, exceeding Tesla’s 735,274 China wholesales from January to November. In comparison, Tesla reported 418,227 vehicle deliveries in the fourth quarter.
Here are Tesla’s key numbers:
Total Q4 deliveries: 418,227
Total Q4 production: 434,358
Total 2025 deliveries: 1.64 million
Total 2025 production: 1.65 million
Deliveries for Q4 2025 were about 16% lower than the fourth quarter of 2024, when Musk’s EV company reported 495,570. Q4 2025 numbers for production were down 5.5% from a year ago, when Tesla produced 459,445 vehicles.
For the full year, Tesla’s deliveries fell 8.6% to 1.64 million from 1.79 million in 2024.
Startups Leapmotor and Xpeng led growth among Chinese EV makers in 2025 with affordable models.
💵 Personal Finance
Student Loan Forgiveness Becomes Taxable Again in 2026: Prepare for the 'Tax Bomb'
A federal tax exemption on student loan forgiveness, enacted in the 2021 American Rescue Plan Act, expired on December 31, 2025, and was not extended. Starting in 2026, debt canceled under the U.S. Department of Education’s income-driven repayment (IDR) plans—typically after 20-25 years—will count as taxable income. With average IDR balances around $57,000, borrowers could face federal tax bills of $7,000–$12,000 (depending on bracket) plus potential state taxes. Public Service Loan Forgiveness remains tax-free.
Experts urge borrowers nearing forgiveness to act proactively: estimate the tax impact, set aside funds, and explore IRS payment plans. A recent settlement clarifies that those who became eligible for forgiveness in 2025 remain tax-free even if discharge occurs later—save dated confirmation records. Advisors can help track eligibility amid the removal of the StudentAid.gov forgiveness tracker.
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