A daily market update from FS Insight — what you need to know ahead of opening bell.
“Anybody talented in any way – they’re called eccentric.” — Thelonious Monk
Overnight
Core CPI rose 0.2% in December, less than forecast BBG
South Korea impeached president arrested after 1,000 investigators scale walls BBC
German economy shrinks for second consecutive year SEM
UK reports surprise fall in inflation, boosting rate cut hopes BBC
Economists say Los Angeles fire to have limited national economic impact RTR
U.S. deaths expected to outpace births within the decade WSJ
NATO to build up defence against Baltic Sea sabotage FT
SEC sues Elon Musk, alleging failure to properly disclose Twitter ownership CNBC
CVS, Cigna, and UnitedHealth inflated cancer and HIV drug prices, FTC says QZ
Goldman Sachs, JPMorgan report soaring results in slew of bank earnings IBD
CFPB sues Capital One, alleges it misled consumers on savings rates CNBC
Ex-Wells Fargo executives face millions in fines for misconduct BBG
JPMorgan Chase exec Daniel Pinto, longtime No. 2 to Jamie Dimon, will step down in June CNBC
Boeing 2024 output plummets, hit by strikes and safety problems BBC
Intel to spin off venture capital arm as chipmaker continues to restructure CNBC
Top BlackRock executive Mark Wiedman to depart FT
Biden opens federal land for AI data centers, sets rules for developers CNBC
Trump says he’ll create ‘External Revenue Service’ for tariffs BBG
US to remove Cuba from state sponsors of terrorist list BBC
Two private lunar landers head toward the moon in a roundabout journey AP
Chart of the Day
| Overnight |
| S&P Futures +8
point(s) (+0.1%
) Overnight range: -3 to +10 point(s) |
| APAC |
| Nikkei -0.08%
Topix +0.31% China SHCOMP -0.43% Hang Seng +0.34% Korea -0.02% Singapore -0.43% Australia -0.22% India +0.16% Taiwan -1.24% |
| Europe |
| Stoxx 50 +0.36%
Stoxx 600 +0.56% FTSE 100 +0.77% DAX +0.61% CAC 40 +0.3% Italy +0.58% IBEX +0.42% |
| FX |
| Dollar Index (DXY) -0.18%
to 109.08 EUR/USD flat at 1.0308 GBP/USD +0.1% to 1.2227 USD/JPY -0.74% to 156.79 USD/CNY +0.01% to 7.3318 USD/CNH +0.03% to 7.3457 USD/CHF -0.07% to 0.9118 USD/CAD -0.03% to 1.4345 AUD/USD +0.15% to 0.6204 |
| Crypto |
| BTC +0.53%
to 96947.7 ETH -0.14% to 3210.0 XRP +5.73% to 2.8235 Cardano +2.26% to 1.0166 Solana +0.17% to 187.53 Avalanche +0.33% to 36.67 Dogecoin -0.56% to 0.3547 Chainlink +0.56% to 20.38 |
| Commodities and Others |
| VIX +0.8%
to 18.86 WTI Crude +0.17% to 77.63 Brent Crude +0.1% to 80.0 Nat Gas -0.25% to 3.96 RBOB Gas +0.79% to 2.121 Heating Oil +0.75% to 2.544 Gold +0.42% to 2688.75 Silver +0.63% to 30.09 Copper +0.2% to 4.351 |
| US Treasuries |
| 1M -1.3bps
to 4.2866% 3M +0.2bps to 4.3066% 6M -0.8bps to 4.311% 12M -1.1bps to 4.1892% 2Y -1.2bps to 4.3543% 5Y -2.1bps to 4.5739% 7Y -2.1bps to 4.683% 10Y -2.3bps to 4.7698% 20Y -1.3bps to 5.0465% 30Y -1.1bps to 4.9639% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 2.0bps to 2.4 bps 10Y-2 Y Spread narrowed 0.6bps to 41.6 bps 30Y-10 Y Spread widened 1.0bps to 19.0 bps |
| Yesterday's Recap |
| SPX +0.11%
SPX Eq Wt +0.81% NASDAQ 100 -0.13% NASDAQ Comp -0.23% Russell Midcap +1.03% R2k +1.13% R1k Value +0.87% R1k Growth -0.37% R2k Value +1.49% R2k Growth +0.8% FANG+ -0.36% Semis +0.33% Software +1.09% Biotech -2.77% Regional Banks +3.4% SPX GICS1 Sorted: Utes +1.3% Fin +1.28% Materials +1.24% Indu +1.16% Energy +0.94% REITs +0.88% SPX +0.11% Cons Staples +0.0% Tech -0.1% Cons Disc -0.32% Healthcare -0.94% Comm Srvcs -0.97% |
| USD HY OaS |
| All Sectors -5.8bp
to 309bp All Sectors ex-Energy -5.4bp to 293bp Cons Disc -5.8bp to 260bp Indu -8.9bp to 236bp Tech -5.2bp to 320bp Comm Srvcs -7.6bp to 498bp Materials -7.1bp to 285bp Energy -4.3bp to 279bp Fin Snr -5.6bp to 272bp Fin Sub -1.3bp to 195bp Cons Staples -4.2bp to 271bp Healthcare -2.5bp to 372bp Utes -5.6bp to 220bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/15 | 8:30AM | Dec CPI m/m | 0.4 | 0.3 |
| 1/15 | 8:30AM | Dec Core CPI m/m | 0.3 | 0.3 |
| 1/15 | 8:30AM | Dec CPI y/y | 2.9 | 2.7 |
| 1/15 | 8:30AM | Dec Core CPI y/y | 3.3 | 3.3 |
| 1/16 | 8:30AM | Dec Import Price m/m | -0.1 | 0.1 |
| 1/16 | 8:30AM | Dec Retail Sales m/m | 0.6 | 0.7 |
| 1/16 | 10AM | Jan Homebuilder Sentiment | 45.0 | 46.0 |
| 1/17 | 4PM | Nov Net TIC Flows | n/a | 203.566 |
MORNING INSIGHT
Good morning!
Today could be an important day because of CPI and Earnings. There are several reasons why we could see the market make some sort of stand.
Click HERE for more.
TECHNICAL
- SPX still would benefit from a minor break to new lows to 5700, technically speaking.
- A few reasons remain important and unresolved before markets can likely bottom out.
- Healthcare looks to be kicking off a sharp mean reversion bounce which would be helpful.
Click HERE for more.
CRYPTO
A recent Bloomberg article offers further evidence, in our view, that it is trade policy that continues to prop up the DXY and weigh on crypto.
Click HERE for more.
First News
Private credit appears to be the idea of the moment in the world of finance. Just a couple days ahead of its earnings report this morning, Goldman Sachs announced a new division that will largely focus on helping it get a bigger slice of this growing pie. Goldman’s new Capital Solutions Group is set to broaden the firm’s presence in both private-equity and private-credit businesses, just in time for what many anticipate will be a deal-friendly environment during the second Trump administration.
Goldman isn’t alone in seeing potential in this market segment. BlackRock made a huge bet in private credit last month with a $12 billion acquisition of HPS Investment Partners on Dec. 3. Meanwhile in October, JPMorgan disclosed plans to expand its presence in this growing market by partnering with private-credit firms such as Cliffwater, FS Investments, and Shenkman Capital Management. Other recent partnerships between banks and private-credit firms include BMO and Canal Road Group, Barclays and AGL, and Wells Fargo and Centerbridge Partners.
Demand for such financing appears to be growing, thanks in large part to the speed and flexibility such financing can offer to borrowers. However, some see the appetite for private-credit investments among institutional investors as slowing. That could explain why the industry is now also looking to the retail investment space, hoping to tap into the FOMO instincts of individual investors. On Dec. 3, 2024, BondBloxx and Virtus Investment Partners separately launched what each firm claimed to be the first private-credit ETF, with each security bundling a portfolio of private-credit CLOs. Industry leaders like Apollo Global Management and KKR are also working on plans to bundle private-credit debt into ETFs
Questions remain about how private-credit ETFs will be able to meet the regulators’ liquidity requirements. While there is some secondary trading of private-credit loans, the nature of such trading makes it difficult to value them in a transparent and accurate manner.
That has some observers concerned about risks to both investors and the financial system. Last April, the International Monetary Fund expressed concerns that the rapid growth of private-credit financing might already be leading to weaker underwriting standards. The IMF noted that “it’s hard to understand how systemic risks may be building given the less than clear interconnections between private credit funds, private equity firms, commercial banks, and investors,” and while it acknowledged that private credit does not currently pose a systemic risk, those “risks may continue to build, with implications for the economy.”
