A daily market update from FS Insight — what you need to know ahead of opening bell.
“Education is not the filling of a pail, but the lighting of a fire.” – William Butler Yeats
Overnight
US expand deportation powers in migration crackdown SEM
Houthis release hijacked crew and signal end to Red Sea attacks WSJ
New fire explodes north of Los Angeles, forcing evacuations NYT
Southeast in deep freeze after record snowfall WSJ
National Security Council staffers grilled about loyalty to Trump AX
Trump threatens Russia with sanctions over Ukraine war CNBC
China’s CSI 300 leads Asia-Pac gains as Beijing urges institutional investors to buy stocks CNBC
Trump moves to expand ‘fast-track’ deportations BBC
Trump piles pressure on Russia to negotiate over Ukraine
Samsung unveils new AI-powered smartphone in fight against Apple FT
Anti-DEI activists target Goldman Sachs and JPMorgan Chase WSJ
TikTok users allege censorship, altered algorithms after Trump saved platform SEM
Apple and Google hit by UK probe Into mobile dominance BBG
LinkedIn accused of using private messages to train AI BBC
France’s electricity generation is nearly fossil fuel-free SEM
Trump’s war on DEI freezes diversity work across federal government WSJ
Gen Z employees are stressed, depressed, and burnt out: Metlife study QZ
2025 Oscar nominations to be announced this morning WSJ
Chart of the Day
| Overnight |
| S&P Futures -8
point(s) (-0.1%
) overnight range: -19 to -1 point(s) |
| APAC |
| Nikkei +0.79%
Topix +0.53% China SHCOMP +0.51% Hang Seng -0.40% Korea -1.24% Singapore +0.67% Australia -0.61% India +0.22% Taiwan +0.97% |
| Europe |
| Stoxx 50 -0.03%
Stoxx 600 +0.16% FTSE 100 +0.07% DAX +0.34% CAC 40 +0.43% Italy +0.36% IBEX +0.38% |
| FX |
| Dollar Index (DXY) +0.16%
to 108.34 EUR/USD -0.03% to 1.0406 GBP/USD flat at 1.2316 USD/JPY +0.09% to 156.39 USD/CNY -0.17% to 7.2884 USD/CNH -0.15% to 7.2924 USD/CHF -0.08% to 0.9076 USD/CAD -0.14% to 1.4399 AUD/USD -0.06% to 0.6270 |
| UST Term Structure |
| 2Y-3
M Spread widened 0.3bps to -2.7bps
10Y-2 Y Spread widened 2.8bps to 33.8bps 30Y-10 Y Spread widened 0.7bps to 21.8bps |
| Yesterday's Recap |
| SPX +0.61%
SPX Eq Wt -0.35% NASDAQ 100 +1.33% NASDAQ Comp +1.28% Russell Midcap -0.36% R2k -0.61% R1k Value -0.55% R1k Growth +1.48% R2k Value -0.95% R2k Growth -0.30% FANG+ +2.77% Semis +1.82% Software +2.12% Biotech +0.77% Regional Banks -1.19% SPX GICS1 Sorted: Utes -2.18% REITs -1.76% Energy -1.75% Materials -0.79% Fin -0.41% Cons Staples -0.26% Healthcare -0.25% Indu -0.17% Cons Disc -0.07% SPX +0.61% Comm Srvcs +1.14% Tech +2.49% |
| USD HY OaS |
| All Sectors -1.2bps
to 295bps All Sectors ex-Energy -1.2bps 278bps Cons Disc -0.5bps 240bps Indu -0.4bps 220bps Tech -2.8bps 299bps Comm Srvcs -4.6bps 477bps Materials -1.6bps 269bps Energy +0.0bps 275bps Fin Snr -1.0bps 258bps Fin Sub -2.2bps 190bps Cons Staples +1.2bps 260bps Healthcare -1.3bps 364bps Utes -0.4bps 211bps * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/24 | 9:45 AM | Jan P S&P Manu PMI | 49.8 | 49.4 |
| 1/24 | 9:45 AM | Jan P S&P Srvcs PMI | 56.5 | 56.8 |
| 1/24 | 10:00 AM | Jan F UMich 1yr Inf Exp | 3.2 | 3.3 |
| 1/24 | 10:00 AM | Jan F UMich Sentiment | 73.2 | 73.2 |
| 1/24 | 10:00 AM | Dec Existing Home Sales | 4.2 | 4.15 |
| 1/24 | 10:00 AM | Dec Existing Home Sales m/m | 1.2 | 4.8 |
| 1/27 | 10:00 AM | Dec New Home Sales | 670 | 664 |
| 1/27 | 10:00 AM | Dec New Home Sales m/m | 6.6 | 5.9 |
| 1/28 | 8:30 AM | Dec P Durable Gds Orders | 0.5 | -1.2 |
| 1/28 | 9:00 AM | Nov Case Shiller 20-City m/m | n/a | 0.32 |
| 1/28 | 10:00 AM | Jan Conf Board Sentiment | 106 | 104.7 |
| 1/29 | 2:00 PM | Jan 29 FOMC Decision | 4.5 | 4.5 |
MORNING INSIGHT
Good morning!
We view the turbulence in equities seen from Dec 6th to Jan 15th as a test of the “resolve of the bulls,” but to us, the “buy the dip” regime is back.
Click HERE for more.
TECHNICAL
- SPX is attempting to break out while RSP, DJIA, and IWM remain laggards.
- US Dollar index’s breakdown looks important and bearish for DXY.
- Many had overemphasized tariffs, leading US Dollar positioning to multi-year highs.
Click HERE for more.
CRYPTO
Lately we have been asserting that the market has been pricing in a worst-case scenario regarding President Trump’s likely trade and tariff policies and their effect on inflation, and that this should ease once Trump actually takes office. In our view, we are seeing evidence of this coming to fruition.
Click HERE for more.
First News
College campuses, traditionally left-leaning and liberal, are currently reporting a rise in young Republican students. But that’s not worrying college deans and administrators. Instead, some of the most prestigious universities in the U.S. – and by extension, the world – are gearing up for four years of a more material type of uncertainty under a new Presidential administration. As part of a host of sweeping changes, President Trump has proposed significantly increasing the tax paid by the endowments of private universities, which he suggests could raise “billions and billions of dollars.” During his campaign, Trump proposed using the proceeds to fund the creation of a free, “non-woke” American Academy that would offer an alternative degree that federal contractors would be forced to accept as purportedly equivalent to accredited bachelor’s degrees.
University endowments are an easy and highly visible target for populists. But it’s tough to say how much taxes can be collected from them when they themselves are not making that much money.
In the years leading up to the Global Financial Crisis, the endowments of elite institutions like Yale made envy-inducing headlines – not just due to their size, but also their mouthwatering returns. The so-called “Yale Model” was credited with helping its namesake institution generate average annualized returns of 16% in the early 2000s. Perhaps less publicized is that this style of investing proved far less successful during and after the GFC, however: many universities incurred significant losses using this model, and they underperformed simpler index-based strategies in many of the following years. Smaller institutions that had hoped the Yale Model of endowment investing would generate earnings to help fund ongoing operations also got a painful lesson in liquidity risk. Many schools ended up modifying their respective investment models or abandoned the Yale style altogether.
Although Ivy League Plus (Ivy League schools alongside non-Ivy schools of comparable prestige, such as MIT, Stanford, and the University of Chicago) endowments haven’t performed disastrously in recent years, neither have they done well enough to induce envy and emulation on Wall Street – especially on a risk-adjusted basis. Simply put, elite schools’ allocation into hedge funds, private equity, and other alternative investments do not appear to have been worth the added risk and reduced liquidity associated with them.
Will that change in what is widely anticipated to be the pro-business environment of the second Trump administration? Our 47th President arguably hopes so, at least for the sake of his proposed American Academy.
