What we’re reading (1/22)
“The Deal To Secure TikTok’s Future In The US Has Finally Closed” (CNN Business). “The transaction’s close concludes a yearslong effort to secure TikTok’s long-term future in the United States and address concerns that it posed a national security risk.”
“Natural-Gas Prices Soar As U.S. Braces For Arctic Blast” (Wall Street Journal). “Natural-gas prices have jumped 63% this week in response to forecasts calling for some of the coldest, snowiest weather in years to freeze the country from the West Texas desert to the Great Lakes. The forecasts have stoked fears of a repeat of the deadly winter storm that froze Texas in 2021 and left millions of people without electricity for days. Energy producers and utilities are preparing for the worst. The Energy Department late Thursday ordered grid operators to be prepared to take extraordinary steps to tap in to backup power generation.”
“Intel Stock Plunges 13% On Soft Guidance, Concerns About Chip Production” (CNBC). “Intel said it expected first-quarter revenue between $11.7 billion and $12.7 billion, and breakeven adjusted earnings per share. That came in below LSEG expectations of 5 cents earnings per share on $12.51 billion in sales.”
“This Stock-Market Indicator Just Flashed One Of Its Most Bullish Signals Since 2000” (MarketWatch). “The average short-term timer that my firm tracks reduced recommended equity exposure on Tuesday by almost 20 percentage points, as judged by the Hulbert Stock Newsletter Sentiment Index. That’s one of the biggest one-day HSNSI drops since 2000, which is how far back data extend.”
“Teaching Economics To The Machines” (Hui Chen, Yuhan Cheng, Yanchu Liu & Ke Tang). “Structural economic models, while parsimonious and interpretable, often exhibit poor data fit and limited forecasting performance. Machine learning models, by contrast, offer substantial flexibility but are prone to overfitting and weak out-of-distribution generalization. We propose a theory-guided transfer learning framework that integrates structural restrictions from economic theory into machine learning models. The approach pre-trains a neural network on synthetic data generated by a structural model and then fine-tunes it using empirical data, allowing potentially misspecified economic restrictions to inform and regularize learning on empirical data. Applied to option pricing, our model substantially outperforms both structural and purely data-driven benchmarks, with especially large gains in small samples, under unstable market conditions, and when model misspecification is limited. Beyond performance, the framework provides diagnostics for improving structural models and introduces a new model-comparison metric based on data-model complementarity.”
What we’re reading (1/21)
“Trump’s Head-Spinning Greenland U-Turn” (Wall Street Journal). “The about-face started with an hourlong speech at the World Economic Forum, where the U.S. president said he wouldn’t deploy the military to take control of Greenland. Later, following a meeting with North Atlantic Treaty Organization Secretary-General Mark Rutte, Trump called off promised tariffs on European nations, contending that he had ‘formed the framework of a future deal’ with respect to the largest island in the world.”
“Stocks Rebound After Trump Backs Off European Tariffs” (New York Times). “Stocks stabilized on Wednesday, recouping much of Tuesday’s sell off after President Trump backed down from his previous threat of imposing more tariffs on any European ally that went against his plan to take over Greenland. Mr. Trump said that the tariffs, originally planned to start at the beginning of next month, were no longer necessary because he had reached ‘the framework of a deal’ related to Greenland with European counterparts.”
“Big Tech Earnings Put Spotlight On AI And Memory Shortage As Trump Tariff Threats Loom” (Yahoo! Finance). “AI will undoubtedly lead the conversation. As in prior quarters, questions remain about how companies are monetizing their vast investments in the red-hot technology and whether hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) and social media giant Meta (META) will continue to increase spending.”
“Trump Warns Powell Won’t Be ‘Very Happy’ If He Stays On At Fed” (Bloomberg). “‘We’ll see how it all works out,’ Trump said in an interview from Davos, Switzerland with CNBC that aired Wednesday. But when pressed on Powell potentially staying on as a Fed governor until 2028, Trump who has been searching for a replacement chair, cautioned that ‘if that happens, his life won’t be very, very happy, I don’t think.’”
“Howard Lutnick Heckled At World Economic Forum Dinner” (Financial Times). “The gathering on Tuesday night descended into uproar after combative remarks from Lutnick, the people said, with widespread jeering, some guests walking out and appeals for calm from Fink, head of the world’s largest asset manager and interim co-chair of WEF.”
What we’re reading (1/20)
“The $100 Billion Of U.S. Goods At Risk Of Tariffs In Trump’s Greenland Push” (Wall Street Journal). “The European Union created a list of hundreds of categories of American products last year that it planned to target with import duties if trade talks with the U.S. unraveled. Those levies were put on hold after the two sides struck a deal last summer, but are set to kick in on Feb. 7 unless the bloc acts to extend the suspension.”
“US Oil Production Now 20% Of Global Oil Production” (Torsten Slok). “US oil production has increased dramatically over the past 15 years…and most of the rise is used for exports[.]”
“Is A Stock Market Rotation Underway? These Sectors Are Outpacing Tech In 2026” (Morningstar). “The market is showing hints of a rotation early this year as small-cap companies rise and the tech sector stumbles, reversing stock market trends from 2025. ‘We are most definitely seeing a rotation, and it has picked up some momentum from the end of last year,’ says Michael Arone, chief investment strategist at State Street. Large-cap companies ended 2025 on a high with gains of 19.78%, ahead of their small- and mid-cap counterparts. But early data points to a possible David-and-Goliath reversal. Small-cap companies’ gains have reached 5.57% in the year to date, while large caps have gained a mere 0.56%. Analysts are also seeing signs of a reversal in sector results. Tech is currently the worst-performing sector, losing 0.40% this year. That’s a major shift after 2025’s AI investment boom lifted tech to second best across all US market sectors.”
“Shifting Tides In Global Markets: The Reemergence Of International Investing” (Enterprising Investor). “After more than a decade of US market dominance, 2025 may have marked a turning point for global investors. International equities have surged ahead of their US counterparts, evidenced by strong earnings growth and supported by policy reform momentum and a reassessment of ‘American exceptionalism.’”
“NYSE To Launch New Venue For Tokenized Stocks” (Ledger Insights). “The New York Stock Exchange (NYSE) is developing a platform to trade and settle tokenized stocks 24/7, though the initiative requires regulatory approval before launching. Additionally, parent company Intercontinental Exchange (ICE) is working with BNY and Citi to support tokenized deposits at its clearing houses, marking new banking partnerships beyond its earlier collaboration with stablecoin issuer Circle.”
What we’re reading (1/19)
“Global Leaders Gather In Switzerland To Ponder The Future Of A Messy World” (New York Times). “Topics of discussion at Davos — according to U.S. and European analysts and former policymakers interviewed ahead of the event — are likely to include Russia’s war with Ukraine; prospects for global trade and markets; the probability of China invading Taiwan; and the risks of a Middle East flare-up caused by the recent uprising in Iran.”
“The Risk Of Higher U.S. Inflation In 2026” (Peter Orszag, Adam Posen). “The consensus view among forecasters is that inflation will continue its gradual descent toward the Federal Reserve's 2 percent target through 2026. Similarly, market pricing suggests investors believe the Fed has largely won its inflation battle. In our view, however, this optimism is premature. We think it is more likely that inflation will surprise to the upside — potentially exceeding 4 percent by the end of 2026. The core drivers are the lagged effects of tariffs, an expansion in the fiscal deficit (which could exceed 7 percent of GDP this year), a tighter labor market reflecting the effects of the shift in immigration policy, monetary policy that is looser than commonly appreciated, and inflationary expectations that are drifting upwards. We believe these factors outweigh the downward‑pressure trends that consensus has been fixated on—namely, the ongoing decline in housing inflation and gains in productivity.”
“Even MBAs From Top Business Schools Are Struggling To Get Hired” (Wall Street Journal). “At Duke University’s Fuqua School of Business, for instance, 21% of job seekers were still looking for work three months after graduation last summer. About 15% of those at the University of Michigan’s Ross School of Business remained on the hunt. Those rates are similar to 2024 but sharply higher than 2019, when many employers couldn’t hire enough white-collar professionals. Just 5% of job-seeking M.B.A.s graduating from Duke then were still looking for work three months postgraduation. At Michigan that year, it was 4%.”
“UK Productivity Surge Signals Economic Turnaround, Study Finds” (Bloomberg). “Britain is seeing early signs of a long-awaited turnaround of its productivity woes, according to an alternative measure that suggests output per hour worked has risen at a pace not seen since before the financial crisis. The Resolution Foundation said a ‘blistering’ productivity surge has been masked by problems with official statistics and pointed to encouraging indications of a clearout of ‘zombie’ firms that contribute little to the economy.”
“Why London’s Chimney Sweeps Are Enjoying A Resurgence” (New York Times). “The mass adoption of central heating in the second half of the 20th century, and the introduction of clean air regulations, meant open fires fell out of fashion and the industry shrank. But some firms survived. Now, many sweeps, including those in the Firkins family business, say the trade has been experiencing an improbable resurgence. According to the National Association of Chimney Sweeps, demand has been bolstered by high energy prices, the popularity of wood-burning stoves and an international climate that has prompted warnings that electricity supplies could be vulnerable to attack by hostile states like Russia.”
What we’re reading (1/18)
“The Magnificent Seven Drove Markets. Now They’re Pulling In Different Directions.” (Wall Street Journal). “The Magnificent Seven is now the Mag Five. Or is it the Fab Four? Investors are no longer grouping the market’s big tech stocks together in quite the same way. The fortunes of what was once Wall Street’s favorite band of megacap names have diverged in the past year, as professional and ordinary investors alike take a more cautious view of the artificial-intelligence spending boom. Only Alphabet and Nvidia outperformed the S&P 500 in 2025.”
“Financialization: How Deficits Inflate Profits And Equity Valuations” (Research Affiliates). “The mid-twentieth-century U.S. economy was built on a foundation of robust domestic saving and investment that created a virtuous cycle of broadly shared growth in prosperity. Seventy years later, that foundation has eroded. Corporate profits and equity valuations have soared even as the net investment that once propelled growth has fallen by more than half. What explains this paradox? The answer is the financialization of the economy.”
“Why The Tech World Thinks The American Dream Is Dying” (Wall Street Journal). “Sheridan Clayborne, a young man working in the AI-startup scene, seemed to embody the current zeitgeist when he was quoted this past fall in the San Francisco Standard. ‘This is the last chance to build generational wealth,’ the online news site quoted him saying. ‘You need to make money now, before you become a part of the permanent underclass.’ It was a sentiment that would have felt at home a few years earlier during the meme-stock craze and YOLO investing approach.”
“Where Meta’s Metaverse Vision Went Wrong” (Yahoo! Finance). “The idea was that users would eventually work and play in interconnected virtual worlds via 3D avatars using full headsets or high-tech glasses. Five years and billions of dollars later, that vision appears to have crumbled.On Wednesday, Meta laid off 1,500 workers from its Reality Labs division, which houses its metaverse business, and shuttered three VR game studios. In December, the company put planned third-party VR headsets from ASUS and Lenovo, which were to run on Meta's VR operating system, on hold, according to Engadget.”
“Investors Sell Dollar, Seek Safety As Trump Threatens Greenland Tariffs” (Reuters). “Investors headed for safe havens while Europe prepared to push back on Monday after U.S President Donald Trump threatened escalating tariffs on allies in the way of his ambition to buy the Danish arctic territory of Greenland.”
What we’re reading (1/17)
“Claude Is Taking The AI World By Storm, And Even Non-Nerds Are Blown Away” (Wall Street Journal). “They call it getting ‘Claude-pilled.’ It’s the moment software engineers, executives and investors turn their work over to Anthropic’s Claude AI—and then witness a thinking machine of shocking capability, even in an age awash in powerful artificial-intelligence tools. Many coders spent their holiday breaks on a “Claude bender,” testing out the capabilities of the latest Anthropic model, Claude Opus 4.5, which they used within a desktop coding tool called Claude Code…Some described a feeling of awe followed by sadness at the realization that the program could easily replicate expertise they had built up over an entire career.”
“Move Over, ChatGPT” (The Atlantic). “Part of what works so well about Claude Code is that it makes it easy to connect all sorts of apps. Sara Du, the founder of the AI start-up Ando, told me that she is using it to help with a variety of life tasks, like managing her texts with real-estate agents. Because the bot is hooked up to her iMessages, she can ask it to find all of the Zillow links she’s sent over the past month and compile a table of listings. ‘It gives me a lot of dopamine,’ Du said. Andrew Hall, a Stanford political scientist, had Claude Code analyze the raw data of an old paper of his studying mail-in voting. In roughly an hour, the bot replicated his findings and wrote a full research paper complete with charts and a lit review.”
“Is This Billionaire A Financial Genius Or A Fraudster?” (New York Times). “Bitcoin has attracted plenty of prophets, braggarts and flat-out baddies. Of late, though, no one in the industry is attracting more attention and scorn than Mr. Saylor, a would-be magnate and accused tax scofflaw who in six short years has transformed his also-ran technology company, Strategy, into a Bitcoin betting machine.”
“Stocks, Bubbles & Market Myths” (Barry Ritholtz). “Perhaps the Mag 7 dominance is fading; if five of these seven companies underperformed the S&P 500, that means the other 493 companies are catching up in both price appreciation and (eventually) earnings growth.”
“Growth Experiences And Trust In Government” (Timothy Besley, Christopher Dann, Sacha Dray, QJE). “Exploiting cohort-level variation, we find that individuals who experience higher GDP growth are more prone to trust their governments, with larger effects found in democracies. Higher growth experiences are also associated with improved perceptions of government performance and living standards. We find no similar channel between growth experience and interpersonal trust. Second, more recent growth experiences appear to matter most for trust in government, with no detectable effect of growth experienced during one’s formative years, closer to birth or before birth. Third, we find evidence of a “trust paradox” whereby average trust in government is lower in democracies than in autocracies.”
What we’re reading (1/16)
“The Global Memory-Chip Shortage Will Cost Us All” (Wall Street Journal). “Prices for memory shot up 50% in the last quarter of 2025 and are projected to increase another 40% to 50% by the end of the first quarter of 2026, according to Counterpoint Research, fueled mainly by builders of data centers, who are willing to pay huge premiums.”
“Stock Investors’ Strategy For 2026: ‘Don’t Fight The White House’” (New York Times). “The U.S. attack on Venezuela sent the value of some oil stocks surging. Mr. Trump’s social media post calling for a cap on credit card interest rates caused the stocks of credit card issuers to slump. And after the president proposed new requirements governing Nvidia’s computer chip sales to China, that tech giant’s stock also fell, weighing on the rest of the market.”
“Why This CEO Won’t Let Private Funds Near His Company’s 401(k)” (Wall Street Journal). “Because of unfamiliarity, concern about high fees and the threat of lawsuits, employers are wary of adding nontraded investments to their 401(k)s. Cerulli Associates, a consulting firm, projects that by 2030, only about 7% of sponsors of 401(k) and similar retirement plans will offer an investment option that includes some private assets. Sullivan thinks employers offering 401(k)s should be even more skeptical. Private and public assets are profoundly different. In a private fund, as Sullivan has learned, even small details can turn into big stumbling blocks.”
“When Housing Policy Becomes Monetary Policy” (Cato Institute). “Basically, the administration is asking Fannie and Freddie to engage in the kind of large-scale asset purchases (LSAPs) the Fed used in the wake of the 2008 financial crisis and the COVID-19 pandemic. LSAPs are controversial even when conducted by the central bank charged with managing monetary policy. Having the GSEs carry out a similar strategy represents a significant expansion of their role and a dangerous institutional precedent. Fannie and Freddie were never designed to function as alternative monetary authorities.”
“Gold Falls As Trump Hesitates On Hassett As Fed Chair Pick” (Bloomberg). “Gold slipped the most in more than two weeks after US President Donald Trump expressed reluctance about nominating Kevin Hassett as Federal Reserve chair, casting further doubt over his search for the next head of the central bank.”
What we’re reading (1/15)
“Powell Investigation Upends Final Stretch Of Fed Chair Contest” (Wall Street Journal). “The criminal investigation into Federal Reserve Chair Jerome Powell threatens to upend the contest over whom President Trump will choose to succeed him as it enters its final stretch. The episode is creating new obstacles on Capitol Hill and raising hard questions about whether any nominee can be seen as independent—tension that was always present but is now much harder to ignore. Trump has made clear he prizes loyalty in his pick, but the Justice Department probe—which Powell said was part of a pressure campaign to get the Fed to lower interest rates—threatens to make that quality a liability.”
“Understanding Long-Term Winners In Emerging Markets” (Larry’s Substack). “Emerging markets have long captivated investors with their promise of rapid economic growth and diversification benefits. However, despite this allure, the reality has been sobering: since the 2008 global financial crisis, emerging market equities have underperformed U.S. equities by almost 10% annually. MSCI’s Anil Rao and Rohit Gupta, authors of the study ‘Long-Term Investing in Emerging Markets: Identifying Drivers of Total Shareholder Return in Emerging Market Equities,’ published in the Winter 2025 issue of The Journal of Investment Beta Strategies, dug into this puzzle, uncovering why some companies thrived while the broader market struggled.”
“Investors Should Not Be Barred From Buying Homes” (Issues & Insights). “The true portion of single-family homes owned by these “plunderers,” those holding 1,000 or more properties, is in reality much lower than 4%. They ‘make up just 2% of all investor-owned homes,’ says CNBC. Ninety percent of the market is actually under the ownership of small investors who have ‘10 properties or less.’”
“Stagflation In 2025. Overheating In 2026.” (Torsten Slok). “In 2025, we worried that the trade war and immigration restrictions would lead to stagflation. With those headwinds fading, the list of tailwinds keeps growing, and we are starting to worry about overheating in 2026. The bottom line is that there are significant upside catalysts to growth and inflation over the coming quarters[.]”
“Did Iran’s Currency Collapse? Rial Plummets To ‘0.00’ Against Euro While Inflation & Protests Escalate Across The Country” (The Sunday Guardian). “In a major blow, the Iranian currency, the rial, has effectively lost its value in Europe, dropping to zero against the euro. As a result, the rial can no longer be exchanged across European countries, further isolating Iran from the global financial system. Inside the country, the situation has deteriorated sharply, with ordinary citizens struggling to afford even basic necessities.”
What we’re reading (1/14)
“Tech Selloff Weighs On Nasdaq; Precious Metals Scale New Peaks” (Wall Street Journal). “Stocks retreated Wednesday, with the Nasdaq composite leading declines as Nvidia and other chip stocks such as Broadcom traded lower. On Tuesday, the Trump administration said Nvidia must meet new security requirements before sending H200 artificial-intelligence chips to China.”
“The Confidence Paradox” (Larry’s Substack). “This divergence between sentiment and fundamentals signals an unease about the sustainability of current conditions. Beneath the surface of steady GDP growth and resilient employment figures, 11 significant risks are developing that warrant consideration.”
“Supply - Demand Imbalance And Commodities” (Disciplined Systematic Global Macro Views). “The current supply-demand imbalance is not just a gold problem, but a silver problem. In fact, there is a supply imbalance with nickel, cobalt, copper, palladium, rhodium, and aluminium, along with a rare earths supply change problem. Surprisingly, all of these imbalances have been documented yet are only now being recognized.”
“Gold, Silver, Copper Surge As Explosive Rally Sweeps Over Metals Market” (Yahoo! Finance). “Gold futures hit a high of $4,650 per troy ounce, marking a 5% year-to-date gain. Wall Street analysts upped their forecasts in recent days in light of the recent US intervention in Venezuela, geopolitical tensions with Iran, and growing questions about Federal Reserve independence.”
“Age Of Invention: Tudor Trade War” (Anton Howes). “The places that protested, in other words, were where the raising of the wage caps would have felt the most out of step with their rising costs; but also where their costs would have fallen furthest and fastest upon the resumption of trade, which would explain why there was no further complaint upon the wage caps being lowered again the following year. In any case, regardless of what really happened in 1495-7 to the wage caps, the effects were brief. But the labour laws were indisputably in force in again, and their enforcement had been significantly tightened. They were soon — as I’ll explain in the next instalment — to become more painful and restrictive than ever before. If the effects of Henry VII on England’s economy were severe, the son whose succession he readily sacrificed it for, Henry VIII, were to be downright devastating.”
What we’re reading (1/13)
“Here’s The Inflation Breakdown For December 2025 — In One Chart” (CNBC). “Progress in the fight to throttle back inflation appeared to stall in December amid price pressures from groceries, dining out, utility gas, clothing and other categories of consumer spending.”
“Fed’s Barkin Calls December Inflation Data Encouraging” (Reuters). “Richmond Federal Reserve President Tom Barkin on Tuesday called December's inflation data "encouraging," though he noted inflation often spikes at the start of the year and said he hopes it will come in at modest levels for the next couple of months.”
“The Copper Boom Is Just Getting Started” (Semafor). “The meteoric rise in the price of copper will likely continue thanks to a growing supply deficit that could reach 10 million metric tons — 25% of projected demand — by 2040, according to a new forecast from S&P Global.”
“Top Risks For 2026” (Eurasia Group). “It's a time of great geopolitical uncertainty. Not because there's imminent conflict between the two biggest powers, the United States and China—that isn't even a top risk, it's a red herring this year. There's not (yet, at least) a second Cold War, with a rising China remaking the global system to its own liking, the Americans and allies resisting. Nor do tensions between the United States and Russia threaten to spiral out of control despite a war raging in Europe, the result of Vladimir Putin's longstanding grievances against the US-led order.”
“More Americans Are Surviving Cancer — Even The Deadliest Ones” (The Washington Post). “More Americans diagnosed with cancer are now surviving the disease — marking a positive trend that experts say reflects the effectiveness of early prevention and detection strategies, and advancements in treatment and care. New findings from the American Cancer Society’s annual report released Tuesday show for the first time that the five-year survival rate for all cancers has reached 70 percent, with the most notable survival gains occurring among people diagnosed with more fatal cancers such as myeloma (a blood cancer), liver cancer and lung cancer.”
What we’re reading (1/12)
“Lawfare For Dummies, Monetary Edition” (Wall Street Journal). “This brings to mind the medieval episode of England’s King Henry II idly importuning some knights to rid him of Archbishop Thomas Becket, only to be surprised when they actually did it. That historical episode proved self-defeating for the king (Becket became a saint and Henry lost his fight for supremacy over the church), and this one may not work out better for Mr. Trump. His saner advisers are worried that Wall Street will view this as an attack on the Fed’s institutional independence, which it is.”
“Powell Investigation: Drumbeat Of Republican Opposition Grows On Capitol Hill” (CNBC). “The GOP resistance could derail Trump’s eventual pick to succeed Powell when the Fed chief’s term is up in May, as North Carolina Republican Sen. Thom Tillis, a member of the Senate Banking Committee, threatens to block any nominee to the central bank until the investigation is resolved. Tillis’ comments are now being echoed by other Republicans.”
“Former Officials Say DOJ Probe Threatens Fed Independence, Has ‘No Place In The United States’” (Yahoo! Finance). “‘The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine [the Fed's] independence,’ said the statement signed by former Fed Chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, as well as four past Treasury secretaries who served under both Republican and Democratic presidents.”
“David Ellison Takes Warner Bros. To Court As Paramount Launches Proxy Battle Over Netflix Bid” (The Hollywood Reporter). “In a letter to WBD shareholders Monday, Paramount CEO David Ellison said his company has filed suit against WBD in Delaware seeking greater financial disclosure of the Netflix deal. Additionally, Ellison said his company plans to nominate its own slate of directors for WBD’s board who they believe would vote against the deal with Netflix.”
“Venezuela Stocks Soar 130% To Record Highs As Maduro’s Ouster Spurs Economic Turnaround Hopes” (CNBC). “Venezuela’s stock market has not only shrugged off the capture of former President Nicolás Maduro by U.S. forces, it has surged to a record high as investors bet that the battered economy could finally see a turnaround. The country’s benchmark Indice Bursatil de Capitalizacion, or IBC, has gained more than 130% since the U.S. operation on Jan. 3.”
What we’re reading (1/11)
“Fed Served With DOJ Subpoenas, Powell Vows To Stand Firm” (Bloomberg). “Federal Reserve Chair Jerome Powell said the US central bank had been served grand jury subpoenas from the Justice Department threatening a criminal indictment, a dramatic escalation of the Trump administration’s attacks on the Fed.”
“Wall Street Is Making Bullish Bets On The Economy” (Wall Street Journal). “Call it the glass half-full market. In recent weeks, government data has been mixed, showing both disappointing job gains and robust economic growth. But U.S. investors have been focusing on the positive side of things, piling into bets that suggest that they have strong confidence that the economy will keep powering forward.”
“‘Inflation Will Surprise To The Downside In 2026’: Why Wall Street Expects Juiced Economy, Stock Gains This Year” (Yahoo! Finance). “Investors may be "having a cake and eating it" in 2026, with Wall Street strategists predicting stock market gains driven by Fed rate cuts, tax incentives, and lower-than-expected inflation.”
“The Landlords Are Not The Problem” (New York Times). “Landlords are not the cause of the nation’s housing crisis, and any plan that reduces investment in housing is only going to make matters worse. The crisis is a simple problem with a complicated solution. The problem is that the United States does not have enough housing. The hard part is building more. It is certainly easier, and perhaps better politics, to talk about barring investors, or imposing rent controls, or kicking immigrants out of the country, but none of that is going to do the trick. The way to make housing more affordable is to build more housing.”
“Credit Growth Accelerating In The US And Europe” (Torsten Slok). “Data for bank lending points to a gradual recovery in the US and Europe[.]”
What we’re reading (1/10)
“Hedge Funds Get Ready For The ‘Donroe Doctrine’ Trade” (Wall Street Journal). “Call it the ‘Donroe trade.’ After the brazen capture of Venezuelan strongman Nicolás Maduro, investors are racing to capitalize on President Trump’s ambitions to dominate the Western Hemisphere. Hedge funds and other investment firms, already boosted by a sharp rally in Venezuelan debt, are mapping out trips to Caracas to scope out on-the-ground opportunities. Some are investigating niche instruments, like arbitration claims and unpaid state debts.”
“Wall Street’s Start To 2026 Is Going Exactly According To Plan. Are Investors Too Confident?” (CNBC). “Not only is the S&P 500 up 1.7% but the tape has broadened just as nearly every play caller has been demanding, with the equal-weighted S&P ahead by almost twice as much. The insistent consensus call heading into the year for a reacceleration in the real economy — propelled by tax-based stimulus and an administration desperate to ‘run it hot’ — has quickly been reflected in market leadership.”
“More Bonds Are Teetering On The Brink Of Junk: Credit Weekly” (Bloomberg). “Beneath the calm surface of the US corporate bond market, there are worrying signs about companies that could lose their investment-grade status. The first full week of the year has been one of the busiest for US corporate debt sales on record, and risk premiums stayed low even amid heavy issuance. But the amount of bonds teetering on the brink of junk surged last year, according to JPMorgan Chase & Co.”
“The Space War Will Be Won In Greenland” (UnHerd). “[O]ne factor remains underplayed. The United States is currently engaged in a fiercely contested space race with China, and, to a lesser extent, Russia. Space offers unlimited energy, unlimited resources, and unlimited internet connectivity — and the High North is crucial. This is because satellites that orbit from pole to pole must pass each pole with every orbit, which means that they fly over a given point in the High North far more often than a given point toward the Equator. As such, places like Svalbard are ideal locations for ground stations that keep in touch with constellations of satellites, be they commercial or military.”
“The Real Da Vinci Code” (Science). “Gonzalez-Juarbe’s swabs may have captured a biological clue. In a remarkable milestone in a decadelong odyssey, he and other members of the Leonardo da Vinci DNA Project (LDVP), a global scientific collective, report in a paper posted today on bioRxiv that they have recovered DNA from Holy Child and other objects—and some may be from Leonardo himself.”
What we’re reading (1/9)
“Gargantuan 'Big Tech' Investment Discredits 'Monopoly' Alarmism” (RealClear Markets). “There’s no such thing as monopoly in the technology sector, or for that matter any sector defined by intense dynamism. Precisely because the potential for outsize investment returns for disrupters in dynamic sectors is so enormous, stasis is tantamount to obsolescence.”
“Even Warren Buffett Couldn’t Keep Beating The Market Without Fail. Here’s Why.” (MarketWatch). “It’s important to focus on this investment lesson because hardly anyone else is doing so. Most of the articles memorializing Buffett’s phenomenal career have instead highlighted how much money you would have made if you had been lucky enough to invest in Berkshire Hathaway when Buffett started in the mid-1960s. While your cumulative (unannualized) return since then would be in the millions of percent, reporting that huge number does not help you become a better investor. Pointing this out isn’t a criticism of Buffett’s incredible abilities. But it’s important to stress that an investor as successful as Buffett will eventually attract so much money from others that even he will find it difficult to repeat his prior successes.”
“Wait, Tesla Is A Value Stock? Welcome To The Wacky World Of Factor ETFs” (Wall Street Journal). “When you crack open several funds that sound the same, you can find very different investments inside. That’s one of the most subtle, but important, lessons of 2025. As exchange-traded funds have become the default choice for millions of investors, it’s vital to understand that you can’t know what you’re going to get unless you take the time to look inside first. To see what I mean, consider factor ETFs, also called smart-beta funds. What’s a “factor”? It’s a set of characteristics, shared by large numbers of companies, that shape risk and return—for example, value or momentum. Academic research has shown that many factors have outperformed the overall market over the long run.”
“Trump Calls For One-Year Cap On Credit Card Rates At 10%” (Bloomberg). “President Donald Trump on Friday called for a one-year cap on credit card interest rates at 10%, effective Jan. 20, without specifying details. ‘Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!’ he wrote on social media.”
“Trump Posted Unpublished Jobs Data Early On Social Media” (Bloomberg). “President Donald Trump posted a chart on social media Thursday evening that included figures in the yet-to-be released December employment report. The chart, which showed the private sector added 654,000 jobs ‘since January,’ matched figures that were not publicly published until 8:30 a.m. in Washington on Friday. It was posted on Truth Social about 12 hours before the data was set to be released.”
What we’re reading (1/8)
“The Stock-Market Rally Isn’t Just About Tech Anymore” (Wall Street Journal). “Investors are finally showing love to companies outside of the tech sector. Growing economic optimism, along with a more cautious view of the artificial-intelligence build-out, is prompting a major “rotation trade” on Wall Street, with investors selling technology stocks and buying up the shares of most every other type of business.”
“Why Big Tech Stocks Are So Much More Attractive Than They Were Only Two Months Ago” (MarketWatch). “For most Big Tech stocks, forward price/earnings ratios have declined recently, and it is not only because share prices have fallen. Forward price/earnings ratios are current stock prices divided by consensus 12-month earnings-per-share estimates among analysts working for brokerage and research firms. For this article, the forward P/E ratios are based on LSEG’s “smart estimates,” which are adjusted weekly to remove extreme outliers among the analysts’ estimates, as well as individual estimates that have not been revised recently.”
“This Simple Metric Could Predict Future Stock Market Returns” (Morningstar). “groundbreaking study, published in the September 2025 issue of the International Review of Economics & Finance, reveals that a surprisingly simple metric—the difference between current S&P 500 earnings yield and long-term real Treasury Inflation-Protected Securities yield—has significant power to possibly predict stock market returns. The research demonstrates that when actual returns deviate from this baseline prediction, these deviations are systematically related to inflation, monetary policy, and economic fundamentals, offering investors a new lens for understanding market dynamics.”
“Rebuilding Ukraine Could Be Top European Investment Theme Of 2026” (Joachim Klement, Reuters). “Rebuilding is expected to cost around $524 billion over the next decade, and it will likely be financed mainly by the European Union and the private sector. Brussels has signalled that, in exchange for its support, it expects European companies to win the bulk of rebuilding contracts. Washington is likely to attach similar conditions, steering any money invested in Ukraine’s reconstruction back toward U.S. contractors.”
“Artificial Intelligence Begins Prescribing Medications In Utah” (Politico). “The state has launched a pilot program with health-tech startup Doctronic that allows an AI system to handle routine prescription renewals for patients with chronic conditions. The initiative, which kicked off quietly last month, is a high-stakes test of whether AI can safely take on one of health care’s most sensitive tasks and how far that could spread beyond one AI-friendly red state.”
What we’re reading (1/7)
“Trump Wants To Bar Wall St. Investors From Buying Single-Family Homes” (New York Times). “President Trump said he wanted Congress to take immediate steps to stop private equity firms and other large investors from buying more single-family homes, embracing a position with populist appeal that has long failed to gain broader traction. Mr. Trump’s announcement, which he made in a social media post on Wednesday, is aimed at Wall Street-backed firms that for years have bought up homes and rented them out. Critics say this business has driven up prices in some markets and made it hard for first-time buyers to purchase homes.”
“Trump Blocks Defense Company Payouts Until Arms Production Speeds Up” (Yahoo! Finance). “U.S. President Donald Trump vowed to block defense contractors from paying dividends or buying back shares until they speed up weapons production, a rare presidential strike at Wall Street norms that sent defense stocks tumbling and signaled sweeping changes for America’s military-industrial complex.”
“Anthropic Raising $10 Billion At $350 Billion Value” (Wall Street Journal). “Anthropic, the developer of the chatbot Claude, plans to raise $10 billion at a valuation of $350 billion before the new investment, according to people familiar with the matter, nearly doubling its valuation from four months ago. GIC, Singapore’s sovereign-wealth fund, and Coatue Management plan to lead the new financing, the people said. The funding round, the third megadeal in the past year, follows a $13 billion investment in September that valued the company at $183 billion.”
“Why Bonds Now Look Like A Better Bet Over Stocks And Gold” (MarketWatch). “Contrarian investors are betting that bonds will outperform both stocks and gold in coming months. That’s because bond market-timers are highly pessimistic right now, kicking bonds out of favor. In contrast, stock and gold market timers are quite optimistic — even to the point of irrational exuberance. In just 15% of trading days since 2000 has the average bond-timer been more pessimistic than currently. In contrast, the average market-timer who focuses on the broad stock market is at the opposite end of the sentiment spectrum. In just 4% of all trading days over the past 25 years has this average stock-market timer been more optimistic than now. The average gold timer is almost as exuberant — 27% of the time over the past 25 years was the average timer more optimistic than today.”
“The Venezuelan Stock Market” (Marginal Revolution). “‘Venezuela’s stock market is now up +73% since President Maduro was captured. Since December 23rd, as President Trump ramped up pressure on Maduro’s government, Venezuela’s stock market is up +148%.’ Here is the link and chart. And up seventeen percent in the last day, and now some more on top of that. Note the bolivar is down only a small amount since December 23. I see the reality as such: a) Immoral actions were taken, leading up to the removal of Maduro, and immoral measures are likely to continue, both from the United States and from various Venezuelan replacement governments. b) Trump’s actions have been some mix of unlawful and unconstitutional, to what degree you can debate. c) In expected value terms, the people of Venezuela are now much better off. It can and should be debated how much a) and b) should be weighted against c). But to deny c), or even to fail to mention it, is, I think, quite delusional. Effective Altruists, are you paying attention?”
What we’re reading (1/5)
“Dow Jumps Nearly 600 Points To Close At A Record As Markets Rally After U.S.-Venezuela Action” (CNBC). “Stocks rose on Monday even after the U.S.’ attack on Venezuela and capture of leader Nicolas Maduro as crude oil prices saw gains and investors bet the action would not lead to bigger geopolitical conflicts that upset markets.”
“A Mystery Trader Made $400,000 Betting On Maduro’s Downfall” (Wall Street Journal). “The trader’s final bet came at 9:58 p.m. ET on Friday, shortly before President Trump ordered the military to move forward. Such contracts were priced at just 8 cents apiece, implying that Polymarket users saw only an 8% probability of the Venezuelan strongman losing power this month, the platform’s data shows. Several hours later, news broke of the U.S. operation to capture Maduro and the contracts shot up in value. In the end, the trader earned nearly $410,000 in profit on about $34,000 worth of wagers. More than half the value of the total wager was placed the evening before the attack.”
“Chevron And Exxon Stocks Jump. Here’s What Analysts Are Saying About Big Oil Companies After Maduro’s Capture.” (MarketWatch). “Shares in the oil sector were flying on Monday as investors scrambled to assess what the capture of Venezuela’s President Nicolás Maduro could mean for the industry. While fresh geopolitical headlines appeared to have little impact on U.S. stocks or crude, the big oil names were moving as some investors gauged future access to oil reserves in the country.”
“Wall Street Sees Another Banner Year For Markets. Could Anything Stop It?” (New York Times). “To many investors, it feels as if the S&P 500 is on autopilot, with nothing but rising returns on the horizon. Last year, the benchmark index racked up 39 record highs — after 57 the year prior — on the way to an annual gain of 16.4 percent. Wall Street expects more of the same this year. Analysts polled by FactSet have forecast, in aggregate, that the benchmark index’s price target will finish 2026 a whisker below 8,000 — at 7,968.78. That would imply, yes, another 16 percent gain from Wednesday’s year-end close of 6,845.50, and would put the S&P 500 on its best four-year pace since the 1990s, according to Bloomberg.”
“What We Learned About Microplastics In 2025” (Washington Post). “They found the plastics were not only entering the brain — they were actually accumulating there. Brains of people who died in 2024, for example, had significantly higher concentrations of microplastics than the brains of people who died in 2016. And there was no correlation between the amount of microplastics and the age of the person at the time of their death.”
What we’re reading (1/4)
“Wall Street Expects The Market To Keep Rallying In 2026 Despite Lofty Valuations” (Wall Street Journal). “Wall Street is betting that falling interest rates and strong corporate earnings will be enough to eke out yet one more year of stock-market gains. It’s going to be close. After posting double-digit percentage increases for three straight years, from 2023 through 2025, the S&P 500 and other major U.S. indexes enter year four of their rally with stretched valuations on many big stocks and a cloudier economic picture. There are enough positives to give investors and analysts hope, but some worry there isn’t enough to keep up the pace of 2025.”
“December Jobs Numbers Get Data Back On Track During First Full Week Of Trading In 2026: What To Watch” (Yahoo! Finance). “Stocks finished trading on Friday — the second-to-last session of the ‘Santa Claus rally’ period — with the Dow Jones Industrial Average leading the major indexes higher to open the new year as investors began to evaluate the 2026 landscape.”
“Asian Markets Rise, Defense Stocks Lead After U.S. Captures Venezuela’s Maduro” (CNBC). “Asia-Pacific markets began the first full trading week of 2026 on a stronger note after the U.S. said it had attacked Venezuela and captured President Nicolas Maduro over the weekend. Oil prices edged lower as markets weighed the potential impact of geopolitical tensions.”
“U.S. Interventions In The New World, With Leader Removal” (Marginal Revolution). “I wish to focus on cases where the key leaders actually were removed. After all, we know that is the case in Venezuela today. Maybe these efforts were rights violations, or unconstitutional, and yes that matters. But how did they fare in utilitarian terms? […] the utilitarian in you, at least, should be happy about Venezuela, whether or not you should be happy on net. You should note two things. First, the Latin interventions on the whole have gone much better than the Middle East interventions. Perhaps that is because the region has stronger ties to democracy, and also is closer to the United States, both geographically and culturally. Second, looking only at the successes, often they took a long time and/or were not exactly the exact kinds of successes the intervenors may have sought.”
“Dow, S&P 500, Nasdaq Futures Steady After US Intervention In Venezuela, Arrest Of Maduro” (Yahoo! Finance). “US stock futures were little changed Sunday night as investors assessed geopolitical developments following a US military operation in Venezuela that led to the removal and arrest of President Nicolás Maduro.”
What we’re reading (1/2)
“Global Stocks’ Great Year Was About More Than The Dollar” (Wall Street Journal). “Dollar worries definitely dominated the headlines in 2025 with “de-dollarization” entering the mainstream lexicon. Worries over the U.S. fiscal path and its political volatility helped power not just foreign stocks, but also gold and crypto. But the dollar’s slide hardly explained everything about non-U.S. stocks’ performance. Global equity strategists at Goldman Sachs, who had recommended global diversification for investors in 2025, broke down the individual performance of several major national indexes by four factors: earnings growth, valuation multiple, dividends and currency adjustments.”
“107% Tariffs On Italian Pasta No Longer Set To Take Effect” (CNN Business). “Most products from the European Union are already subject to tariffs of at least 15%. The pasta-specific tariffs, initially proposed in October at 92%, would have subject Italian pasta to a total rate of 107%. The newly announced rates would put the levies between 24% and 29%.”
“Bridgewater, D.E. Shaw Among Top Hedge Fund Gainers Of 2025” (Bloomberg). “Bridgewater Associates’ flagship money pool posted record gains, while D.E. Shaw & Co.’s strategies soared as much as 28% to rank among the biggest hedge fund winners of 2025 when tariff-fueled market uncertainty presented a fertile hunting ground for traders. Bridgewater’s Pure Alpha II macro fund returned 34% last year, its best ever, while the All Weather strategy rose 20%, a person with knowledge of the matter said, asking not to be identified discussing private information. D.E. Shaw’s flagship multistrategy Composite hedge fund gained 18.5% and Oculus made an estimated 28.2%.”
“Self-Driving Cars Aren’t Nearly A Solved Problem” (Yarrow Bouchard). “Contrary to popular belief, Waymos aren't actually fully autonomous, and the problem is harder than it may seem.”
“US On Verge Of Losing Measles Elimination Status As Outbreak Surges In South Carolina” (The Mirror). “The United States is on the verge of losing its measles elimination status as cases surge amid an ongoing outbreak in South Carolina, where hundreds are in quarantine.”
December performance update
Prime: -1.24% (-0.23% LTM)
Select: +7.15% (+44.05% LTM)
SPY ETF: +0.76% (+17.72% LTM)
Bogleheads Portfolio (80% VTI + 20% BND): +0.55% (+18.36% LTM)