Morning in New York: investors remain bullish

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Technical signals contribute to the optimistic mood of stock exchange players. All sectors in the S&P 500 are trading above their 200-day averages, which is historically a bullish signal. The percentage of stocks above their 200-day averages reached 68%, the highest since August 2025.

At the same time, retail investors poured $12 billion into the market last week, according to J.P. Morgan, and their activity in buying individual stocks is at its peak in nine months. Such euphoria often indicates the proximity of a local high. Similar moods are observed on credit markets. According to Bloomberg, spreads on corporate bonds have narrowed to 103 basis points, the lowest since June 2007. Against this background, a number of major asset managers, including Aberdeen Investments and PIMCO, point to the lack of investor caution associated with the reduction of risk premium and high activity in the market of corporate debt placements.

The key macroeconomic event this Friday, January 16, will be the publication of the industrial production index for December (consensus: +0.1% m/m, November: +0.2% m/m). Strong results may dampen expectations about the Fed's imminent rate cuts.

The foreign policy background is determined by the signs of de-escalation of the situation around Iran on the back of the US refusal to intervene militarily and the ongoing oil blockade in Venezuela, which can cause increased volatility in energy prices.

PNC Financial Services Group (PNC) and State Street Corporation (STT ) will present quarterly reports before the opening of the main session.

Futures on US indices show weak positive dynamics. We assess the balance of risks for the upcoming trades as neutral with moderate volatility. We focus on the S&P 500 fluctuations in the range of 6900-6990 points (from -0.7% to +0.7% to the closing level of the previous session).

- Shares of J.B. Hunt (JBHT) were down more than 4% in premarket trading on January 16 after the company released its quarterly report, which reflected an unfavorable situation in the trucking sector. The company's earnings per share beat expectations thanks to cost cuts, while revenue came in below consensus amid falling volumes in its key intermodal segment.

- QXO (QXO) is down 4.2% after announcing a $750 million common stock offering in conjunction with the release of preliminary fourth-quarter results, as the additional share issue poses a risk of dilution to existing shareholders.

- Woodward's (WWD) securities are losing about 1.5% before the open of major trading after the company announced it is winding down its gas truck business in China, which the company attributed to strategic optimization and focus on higher margin areas.

- Shares of Sylvamo (SLVM) reacted with a 2% gain in the premarket to the company's own 2026 guidance. While management said last year and this year will be the low point of free cash flow, investors are focused on the long-term potential. After the investment cycle, the company expects to generate more than $300 million of free cash flow per year.

January 15 trading on the U.S. stock exchanges ended on the positive territory, but below the session highs. S&P 500 added 0.26%, Nasdaq 100 rose 0.32%, Dow Jones rose 0.6%, Russell 2000 - 0.86%.

The companies of the "Magnificent Seven" once again showed mixed dynamics. The greatest activity of buyers was observed in shares of Nvidia (NVDA: +2.1%). Quotes of Alphabet (GOOGL: -0.9%) went into a small minus.

The utilities sector (XLU: +1.02%) was the leader of the growth. The energy sector (XLE: -0.94%) was the outsider amid a sharp drop in oil prices.

A strong report and optimistic outlook from the world's largest chip maker TSMC (TSM: +4.4%) dispelled fears of weakening demand for these products. Additional support for the semiconductor industry was provided by the news of a trade agreement between the US and Taiwan. As part of the deal, Taiwanese companies will invest at least $250 billion in production facilities in the United States in exchange for lower import tariffs. This news removes much of the geopolitical uncertainty and encourages investment in the US technology sector.

"The bullish sentiment was reinforced by the quarterly results of major investment banks. Reports from Goldman Sachs (GS: +4.6%) and Morgan Stanley (MS: +5.8%) exceeded expectations thanks to a recovery in activity in the investment banking and wealth management segments. BlackRock (BLK: +5.9%) showed record capital inflows and an increase in assets under management.

The number of initial applications for unemployment benefits for the past week amounted to only 198 thousand with a consensus of 215 thousand. The indexes of manufacturing activity from the FRB of New York and Philadelphia for January unexpectedly showed a strong growth. The statistics, indicating the stability of the economy, was perceived ambiguously by the market. On the one hand, it reduces the risks of recession, on the other hand, it weakens the arguments in favor of the Fed's soon easing monetary policy. Against this background, yields of short-term government bonds went up.

The head of FRB Atlanta Raphael Bostic and his counterpart from FRB Chicago Austan Goolsbee kept a hawkish attitude in their recent statements, emphasizing the need to maintain restrictive monetary policy to fight inflation.

- Positive reaction to the TSMC report led to the growth of ASML shares (ASML: +5.4%). TSMC plans capex in 2026 in the range of $52-56 bln, which significantly exceeded the average market expectations and acted as a direct positive signal for ASML - a leading supplier of chip manufacturing equipment.

- Kroger (KR) and Uber (UBER) announced the launch of a joint delivery service, weakening Instacart's (CART: -2.6%) competitive position and posing a direct threat to its business model.

- Strive Compounding Pharmacy initiated antitrust investigations against Novo Nordisk (NVO: -3.0%) and Eli Lilly (LLY: -3.8%). This reinforces investors' concerns about legal risks in the obesity drugs segment, including issues of market competition and access to alternative forms of therapy.

- Clearway Energy (CWEN: +6.8%) has signed 20-year contracts worth more than $2.4 billion with Alphabet (GOOGL) , which will provide the energy provider with long-term stable and predictable cash flow.

- French pharmaceutical company Sanofi, according to rumors, may make an improved takeover offer for Ocular Therapeutix (OCUL: +1.9%).

This article was AI-translated and verified by a human editor