January 27th Market Overview

Happy Tuesday

S&P made a new high and honestly that number is lying to you. Healthcare just lost $92 billion in a single session. Tech did all the lifting while insurers got wrecked. If you only looked at the close you'd have no idea.

Premium members - pull up the dashboard. Breadth is telling a different story than the close. Days like today are why I built this thing.

Let’s dig in...

Today's Big Picture

Consumer Confidence Collapses 

Conference Board sentiment hit 84.5 versus 90 expected, the lowest since May 2014. The expectations index fell to 65.1, well below the 80 threshold that has historically preceded recessions. Labor market internals were ugly: "jobs plentiful" dropped to 23.9% from 27.5% while "jobs hard to get" climbed to 20.8%.

This data came the same week University of Michigan sentiment actually improved, so you've got dueling surveys. I'd weight Conference Board more heavily here since it samples five times as many households. If consumers are getting nervous about jobs while inflation stays sticky, the Fed's in a tough spot.

Old Economy Splits General Motors 

$GM crushed earnings, raised its dividend, and announced a $6 billion buyback. Stock hit a 52-week high. Meanwhile UPS $UPS is cutting 30,000 jobs as they unwind their Amazon partnership and close 24 buildings.

Medicare Shock Wipes Out $92 Billion 

Trump administration proposed raising Medicare Advantage rates by just 0.09% for 2027. Wall Street expected 4-6%. Humana $HUM lost a fifth of its value and UnitedHealth $UNH fell hard after guiding 2026 revenue below $439 billion versus Street estimates above $455 billion.

Market Overview

Index Performance

Stock Spotlight

UnitedHealth $UNH ( ▲ 3.1% ) 
medical care ratio came in at 92.4% with operating margin collapsing to 0.3%. Took a $1.6 billion charge in the quarter.

General Motors $GM ( ▲ 1.44% ) 
beat with $2.51 adjusted EPS versus $2.28 expected. Goldman, Citi, and UBS all reiterated buy ratings with targets around $97-98.

Corning $GLW ( ▲ 1.49% ) 
signed a deal with Meta $META worth up to $6 billion through 2030 for fiber-optic cable. Stock hit levels not seen since the dot-com era.

CoreWeave $CRWV ( ▲ 0.36% ) 
received a $2 billion investment from Nvidia $NVDA to accelerate its AI factory buildout. Deutsche Bank upgraded to buy with a $140 target.

Big Name Updates

Boeing $BA ( ▲ 1.51% ) 
beat revenue at $23.95 billion versus $22.5 billion expected. Backlog hit $682 billion. The 737 production rate increased to 42 per month. Stock drifted lower on defense segment weakness.

Micron $MU ( ▼ 0.56% ) 
plans to invest $24 billion in a new NAND fab in Singapore. Wafer output targeted for late 2028 as the memory shortage tightens.

Meta $META ( ▼ 1.55% ) 
expanding domestic manufacturing footprint for data centers ahead of Wednesday earnings. The Corning deal is part of a broader push to source advanced tech domestically.

Northrop Grumman $NOC ( ▲ 1.08% ) 
beat on both revenue and EPS. Full-year guidance came in slightly below Street estimates on both lines.

Other Notable Company News

Salesforce $CRM ( ▲ 2.31% ) 
signed a 10-year, $5.6 billion deal with the Army for cloud software modernization.

USA Rare Earth announced a $1.6 billion investment deal with Commerce. Benchmark raised its target to $45.

American Airlines $AAL ( ▼ 1.21% ) 
still struggling with storm Fern. Over 950 flights canceled Tuesday. CEO called Dallas "still a skating rink."

Pinterest $PINS ( ▼ 16.83% ) 
cutting up to 15% of workforce to pivot toward AI.

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Sector Watch

Bond Market

The Fed meets Wednesday. Expected to hold at 3.5%-3.75%. Markets still price two quarter-point cuts by year-end. The 10-year sits around 4.23%.

CNBC Fed Survey shows respondents expect Kevin Warsh to replace Powell. Prediction markets favor BlackRock's Rick Rieder.

Policy Watch

Dollar Weakness 
Dollar Index heading for its lowest settle in nearly four years. Japan's Finance Minister said they'll take "appropriate action" if needed. Treasury took steps Friday that sparked intervention speculation.

Shutdown Risk 
Democrats threatening to oppose funding past January 30 over ICE incidents that left 2 Americans dead this month. Jeremy Siegel puts odds above 70% and says this "should impede the upward movement in the market."

Medicare Rates 
Gov’t proposal is preliminary. Heavy lobbying expected before final rates in April. Signal: this administration isn't prioritizing insurer margins.

Also Watching

• Energy Secretary Wright granted emergency authority to redirect power from data centers to homes during the cold snap

• EU-India free trade deal worth $4.8B annually to EU; car tariffs drop to 10% from 110%

What to Watch

Fed Decision Wednesday 
The hold is priced in. Powell's commentary isn't. Watch for signals on timing of future cuts.

Big Tech Earnings Microsoft 
$MSFT and Meta $META report Wednesday. Tesla $TSLA same day. Apple $AAPL Thursday. AI spending commentary will move the tape.

Shutdown Deadline January 30 
Three days away. Political theater until it isn't.

Dollar/Yen 
Any actual intervention would be rare. The dollar at multi-year lows against a Fed expected to hold is the setup to watch. If intervention happens metals will likely go up.

Thanks for reading - you are now the more informed 🙂

- John

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