[Market Summary]
The three major New York indices closed with slight gains on January 12 (local time). However, the market reacted sensitively to the news that the Trump administration has launched a criminal investigation into Federal Reserve Chair Jerome Powell.
Dow Jones: 49,590.20 (+86.13 pts, +0.17%)
S&P 500: 6,977.27 (+10.99 pts, +0.16%)
Nasdaq: 23,733.90 (+62.56 pts, +0.26%)
The Powell Investigation: The market was rattled as the Trump administration launched a probe into Chair Powell for potential criminal prosecution. The allegations involve mismanagement of the Fed headquarters renovation project and perjury before Congress. Powell revealed in a video that he received a grand jury subpoena and a threat of criminal indictment on Jan 9, related to his June testimony. He called this an "unprecedented" move and a result of political pressure due to the Fed’s independent interest rate decisions. While President Trump and the White House denied direct involvement, market participants remain cautious, viewing it as a "tug-of-war" between the administration and the Fed.
Credit Card Sector Slump: Shares of Visa and Mastercard fell over 1%, while American Express dropped over 4% after President Trump proposed a one-year cap on interest rates, leading to expectations of worsened earnings.
FedWatch: According to the CME FedWatch Tool, the federal funds futures market reflects a 95.0% probability of a rate freeze in January.
[Major IB Investment Opinions]
Nvidia (NVDA) & Broadcom (AVGO): Bernstein maintained both as Top Picks, noting that AI capital expenditure shows no signs of slowing down.
Apple (AAPL): BofA maintained a Buy rating, expecting earnings to exceed consensus due to strong iPhone sales and service growth.
Netflix (NFLX): HSBC initiated coverage with a Buy rating ($107 target), viewing recent dips as a buying opportunity.
Amphenol (APH): Barclays upgraded to Overweight, citing expanded use of components in AI data centers and market share growth.
ConocoPhillips (COP): Wells Fargo upgraded to Overweight, highlighting attractive valuation and consistent dividend increases.
Datadog (DDOG): Morgan Stanley upgraded to Overweight, citing a solid growth outlook through 2027 driven by cloud migration and AI agent adoption.
[Featured Stocks & News]
■ Nvidia (NVDA) & Eli Lilly (LLY)
The two giants have joined forces, co-investing $1 billion to establish a lab that utilizes AI to accelerate drug discovery. Over the next five years, the investment will go toward infrastructure, computing resources, and talent. Nvidia engineers will collaborate with Lilly's biological and scientific experts to build AI models for drug development.
■ Alphabet (GOOGL)
Unveiled the Universal Commerce Protocol (UCP), a standard platform for AI shopping agents. Google aims for UCP to become an industry standard, creating an integrated system from search to payment so retailers can connect various functions without building their own tools.
■ Amazon (AMZN)
Began selling Novo Nordisk’s (NVO) oral Wegovy tablets through Amazon Pharmacy. Insured customers can pay as little as $25/month, while cash prices start at $149—the lowest cash entry point in the market. Amazon also plans to offer these via kiosks at One Medical clinics soon.
■ Meta Platforms (META)
Australia Ban: Reported blocking 550,000 accounts in Australia following the new law banning social media for those under 16. In the first week, 330,639 accounts were blocked on Instagram, 173,497 on Facebook, and 39,916 on Threads.
New Leadership: Recruited Dina Powell McCormick, a former Trump national security advisor and Goldman Sachs veteran, as Vice Chair to strengthen ties with the administration.
■ 2026 Semiconductor Outlook (Mizuho)
Nvidia & Broadcom: Raised target prices to $275 and $480, respectively, as AI Capex is expected to hit $540B.
Lumentum (LITE): Raised target from $325 to $455 as data centers shift from copper to optical networks.
■ SolarEdge (SEDG)
TD Cowen upgraded to Buy ($38 target). Turnaround pillars include financial health, manufacturing in the U.S., and access to 45X tax credits. Gross margins are projected to hit 28.7% by 2027.
■ Seagate Technology (STX)
Mizuho: Maintained Outperform, raised target to $370.
Goldman Sachs: Maintained Buy, raised target to $310 on strong pricing and profitability outlook.
■ Airbnb (ABNB)
B. Riley upgraded to Buy ($170 target), noting healthy growth fundamentals and attractive valuation. New features like "Reserve Now, Pay Later" are seen as structural drivers.
■ Sector Downgrades
CrowdStrike (CRWD): KeyBanc downgraded to Sector Weight, stating AI integration hasn't yet driven significant growth.
Snowflake (SNOW): Barclays downgraded to Equal Weight ($250 target) due to high valuation and intense competition.
■ Exxon Mobil (XOM) & Banking Sector
Exxon: Trump warned Exxon could be excluded from the Venezuelan market, criticizing CEO Darren Woods for "playing too cute."
Banks (C, BAC, WFC): Under pressure after Trump demanded a 10% cap on credit card interest rates.
■ GE Vernova (GEV)
GLJ Research raised its target price from $805 to $1,087, noting that gas turbine capacity is sold out through 2028 and EBITDA could hit $13.8B.
■ Retail & Consumer
Abercrombie & Fitch (ANF): Lowered its annual revenue growth outlook to "at least 6%" and adjusted EPS guidance downward.
Lululemon (LULU): Raised its Q4 revenue estimate to $3.5B–$3.585B and EPS to $4.66–$4.76.
■ Healthcare & Biotech
Regeneron (REGN): Emphasized its R&D competitiveness and 45 clinical programs at the JP Morgan Healthcare Conference.
UnitedHealth (UNH): Facing new regulatory risks after a Senate probe alleged the company used Medicare Advantage risk adjustments as a profit model.
Beam Therapeutics (BEAM): Surged after reaching an agreement with the FDA on the clinical path for BEAM-302, opening the door for accelerated approval.
■ Media & M&A
Paramount Skydance (PSKY): Escalated its proxy fight against Warner Bros. Discovery (WBD), demanding more transparency regarding the Netflix deal and offering $30/share in cash.
Allegiant Air (ALGT): Agreed to acquire Sun Country Airlines (SNCY) for $1.5 billion.
[After-Hours & Specialized Highlights]
CoreWeave (CRWV): CEO rebutted concerns over GPU lifespan. Moody's identified it as a top 6 hyperscaler. The company plans to adopt Nvidia’s Rubin tech in late 2026.
Wayfair (W): Partnered with Google on UCP to allow instant purchases within Google Search/Gemini apps.
Chipotle (CMG): Announced a leadership reshuffle, appointing Ilene Eskenazi as Chief Legal and HR Officer.
