New York morning: focus on inflation and the start of the reporting season

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

The Consumer Price Index (CPI) for December (consensus: +0.3% month-on-month, November: +0.1% month-on-month) will be the focus of upcoming trading. Freedom Broker macroeconomists note increased uncertainty around this release due to the technical effects of the shutdown and ambiguous data for November. In this regard, our experts do not rule out that the actual figure will be higher than forecasted and its growth may approach 0.4% month-on-month. But even such a value, most likely, will not be taken as a signal of real acceleration of price growth. The benchmark, based on the Freedom Broker model, assumes a 0.19% and 0.18% m/m increase in total and core CPI, respectively. If the consensus results are exceeded, the structure of the index will be important, as well as a possible revision to the November figure.

US President Donald Trump has imposed a 25% duty on all goods from countries doing business with Iran. The move, aimed at economically isolating the Islamic Republic, creates new risks to global trade and could negatively impact international companies. The White House continues to pressure big business on issues sensitive to consumers. Trump has said his administration is working with Microsoft (MSFT) and other technology companies to ensure that building energy-intensive data centers for AI does not lead to higher energy bills for the public.

The fourth quarter reporting season kicks off today with the release of results from J.P. Morgan (JPM), Bank of New York Mellon (BK) and Delta Air Lines (DAL).

Futures on US stock indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming trades as neutral with increased volatility. We focus on S&P 500 fluctuations in the range of 6920-7030 points (from -0.8% to +0.8% of the previous session's closing level).

- Heritage Global (HGBL) shares soared more than 32% on the premarket after announcing the acquisition of The Debt Exchange (DebtX). The deal will significantly strengthen Heritage Global's financial assets division and expand its presence in the growing secondary credit market.

- Revvity (RVTY) quotes are adding over 5% before the opening of the main session as the company improved its 2025 adjusted earnings guidance.

- PAR Technology (PAR) shares are up more than 5% after announcing a partnership with pizza chain Papa Johns.

- Option Care Health (OPCH) securities are adding about 3% on the back of a confident guidepost for fiscal 2026 and an increase in its buyback program to $1 billion.

- The announcement of a 20-year power purchase agreement with Switch has supported shares of Ormat Technologies (ORA), which are up nearly 2% on the premarket.

- Wayfair (W) has become one of Alphabet's (GOOGL) key partners in developing a new standard for AI agents and retailers to interact (Universal Commerce Protocol). This technology will simplify AI Mode shopping in Search and Gemini without going to Wayfair's website.

- Shares of Travere Therapeutics (TVTX) collapsed more than 25% before the opening of the main session following an update on drug development progress.

January 12 trading on the U.S. stock exchanges ended on a positive territory. S&P 500 once again set a historical maximum, rising by 0.16%. NASDAQ 100 grew by a symbolic 0.08%, Dow Jones added 0.17%, Russell 2000 - 0.44%.

In the "Magnificent Seven", Alphabet (GOOGL: +1%) was the most notable positive performer after announcing a multi-year partnership with Apple (AAPL: +0.34%) to integrate Gemini AI technology into its functionality, including Siri. Trading opened lower, which was triggered by Donald Trump's threats to the Fed. Quotes were brought back to the green sector by the response of the head of the regulator Jerome Powell, who called the investigation of the Ministry of Justice a pretext for interference in monetary policy, as well as criticism of the actions of the U.S. President by some representatives of the Republican Party. The foreign policy situation, in particular the unceasing protests in Iran, continued to determine market movements. Investors also acted with an eye on the fourth quarter reporting season, which starts these days.

The financial sector (XLF: -0.79%) was the outsider on the back of the US President's initiative to cap credit card rates at 10% per annum. Capital One (COF: -6.42%), Synchrony Financial (SYF: -8.36%) and American Express (AXP: -4.27%) experienced the greatest pressure.

Profit taking was also seen in retail. Despite generally positive preliminary data on holiday season sales, shares of Abercrombie & Fitch (ANF: -17.7%), Urban Outfitters (URBN: -12.3%) and American Eagle (AEO: -3.5%) fell due to inflated investor expectations. Suppliers of consumer staples (XLP: +1.17%), whose shares have a protective status, became the leaders of growth.

- Tempus AI (TEM: +4.5%) reported that the value of its contracts exceeded $1.1 billion and its revenue retention rate reached 126%. It also announced agreements with major pharmaceutical companies.

- Lululemon (LULU: +2.5%) raised its fourth-quarter earnings guidance to the top end of its previously reported range.

- The New York Times reported that Meta Platforms (META: -1.7%) plans to cut about 10% of the staff at its Reality Labs division.

- Duolingo's (DUOL: -8.5%) preliminary orders (bookings) data came in at the upper end of estimates, with investors concerned by comments about the intention to continue investing in the product at the expense of short-term profits.

- Allegiant Travel (ALGT: -6.3%) is buying Sun Country Airlines (SNCY: +10.6%) for $1.5 billion.

- According to media reports, Eli Lilly (LLY: +1.6%) is considering acquiring French biotech ABivax for $17.5 billion.

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