January 21st Pre-Market

Good morning.

Trump just told Davos he won't rule out taking Greenland by force. Europe responded by freezing a trade deal. The Supreme Court is hearing whether he can fire Fed governors.

Foreign bond selling is picking up and I don't think that's just noise.

The world is repricing U.S. leadership risk into our debt. Worth watching.

Let's dig in…

Today's Big Picture

Trump speaks at Davos

Trump's late Davos address doubled down on acquiring Greenland (refusing to rule out force), questioned NATO's value, and drew direct pushback from Macron.

France and the EU are threatening to block U.S. companies. 

Direct response to Trump's tariff threats. Our biggest trade relationships are cracking. I think we are watching our most important trade deals fall apart in real time.

Fed independence is on trial at the Supreme Court. 

The Court is hearing a case centered on President Trump’s attempt to remove Fed Governor Lisa Cook

If markets start pricing political influence over interest rates, expect volatility to show up first in the long end of the Treasury curve.

Market Overview

Stock Spotlight

United Airlines $UAL ( ▲ 9.26% ) 

says wealthy travelers are back. Good year ahead despite shutdown costs.

Johnson & Johnson $JNJ ( ▲ 0.93% ) 

beat on strong cancer drug sales. Patent loss stung but new drugs picked up the slack.

Charles Schwab $SCHW ( ▲ 3.02% ) 

Beat EPS estimates ($1.39 vs $1.32-1.37) but missed revenue by 0.6%, Wall Street wanted perfection after a monster year

Meta Platforms $META ( ▼ 1.31% ) 

faces another FTC appeal. Government wants Instagram and WhatsApp broken off.

Tesla $TSLA ( ▲ 3.5% ) 

dropped after Musk dialed back robotaxi hype. Production will ramp slowly. 

Nvidia $NVDA ( ▲ 7.87% ) 

heads to China for AI chip talks. Jensen Huang chasing that market despite trade wars.

Bond Market

Treasury yields cooling off after yesterday's beating. Bonds are flashing a warning to Washington.

US10Y: (4.279)

US20Y: (4.871)

US30Y: (4.913)

Policy Watch

Fed 

Supreme Court weighs whether the President can fire Fed governors.

Government 

New executive order aims to stop big firms from hoarding houses. Targets institutional buyers to give regular people a shot.

Fiscal & Trade 

Trump wants tariffs on eight allies next month. Goes up big by June if he doesn't get Greenland.

International 

The EU Parliament froze ratification of a U.S. trade deal as a "warning shot" after Trump threatened tariffs on six nations over Greenland, with von der Leyen urging the bloc to "toughen up."

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What to Watch

• Trump's Davos address amid Greenland tensions

• Schwab earnings miss sparks pre-market selloff

• EU freezes trade deal in tariff warning shot

• Supreme Court weighs Fed independence in Trump v. Cook

Thanks for reading 🙂

- John

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