"There is no path to peace. Peace is the path." ✍️☮️

- Mahatma Gandhi

SUMMARY

✅ U.S. stocks extended their rally as drama over Greenland faded.

✅ Trump said the U.S. and NATO have reached a preliminary framework on Greenland, prompting him to drop planned European tariffs and easing recent geopolitical tensions.

✅ The Fed’s preferred inflation gauge rose to 2.8% in November, remaining above target but consistent with expectations as consumer spending continued to support economic growth.

✅ Supreme Court justices signaled skepticism toward the Trump administration’s effort to remove Fed Governor Lisa Cook, underscoring concerns about preserving central bank independence.

✅ Blue Origin unveiled plans for a massive satellite internet network aimed at challenging SpaceX and Amazon, marking a major expansion beyond its traditional rocket business.

✅ Intel shares surged to their highest level since early 2022 ahead of the company reporting stronger-than-expected fourth-quarter results on Thursday. Shares slid in after-hours trading on the company’s cautious guidance.

MARKET SNAPSHOT

↗ Dow 49,384.01 + 0.63%
↗ Nasdaq 23,436.02 + 0.91%
↗ S&P 6,913.35 + 0.55%

GOVERNMENT

Trump Says Greenland Deal Framework Reached with NATO, Drops Threat of Europe Tariffs

Image courtesy of Sean Gallup/Getty Images

President Donald Trump said Wednesday that he and NATO Secretary General Mark Rutte have agreed on what he called a “framework of a future deal” concerning Greenland, prompting him to back away from plans to impose new tariffs on several European countries.

Trump said the negotiations led him to abandon punitive tariffs that were scheduled to take effect Feb. 1. U.S. stocks surged immediately following his announcement.

Speaking minutes later in an interview with CNBC’s Joe Kernen, Trump characterized the Greenland agreement as the “concept of a deal,” offering few additional details.

In a post on Truth Social, Trump said the framework could eventually cover Greenland and the broader Arctic region, calling it beneficial for both the United States and NATO allies. He added that further discussions are underway, including talks related to the “Golden Dome” defense initiative as it pertains to Greenland. Vice President JD Vance, Secretary of State Marco Rubio, Special Envoy Steve Witkoff, and others will lead negotiations and report directly to him.

Specifics of the proposed framework remain unclear, and the White House did not immediately respond to requests for further information.

Despite the lack of detail, the announcement marks a sharp turn in an escalating dispute over Trump’s long-running push for U.S. control of Greenland. In recent weeks, the administration had floated the idea of purchasing the territory—or even using military force—despite Greenland being an autonomous territory of Denmark, a NATO ally.

Danish and Greenlandic officials have repeatedly rejected those overtures, insisting the island is not for sale. As tensions rose, several European NATO members increased their military presence in the region. Trump responded over the weekend by threatening tariffs starting at 10% next month and rising to 25% by June.

Earlier Wednesday, during remarks at the World Economic Forum in Davos, Trump argued that U.S. control of Greenland is vital for national security, though he reiterated that he would not pursue the territory through military means. Markets, which had sold off sharply a day earlier amid rising geopolitical tensions, rebounded strongly following his latest comments.

ECONOMICS

Fed’s Preferred Inflation Gauge Ticks Higher and Remains Above Target

Image courtesy of Kapustin Igor / Shutterstock

Inflation edged further away from the Federal Reserve’s 2% target in November, though the latest reading matched expectations, according to data released Thursday.

The personal consumption expenditures (PCE) price index — the Fed’s primary inflation measure — rose to 2.8% year over year in November for both headline and core inflation, in line with market forecasts. October’s headline and core PCE inflation were both revised to 2.7%.

On a monthly basis, prices increased 0.2% in both October and November. The Bureau of Economic Analysis released the two months of data together following delays caused by the government shutdown.

The report also showed personal income rising 0.1% in October and 0.3% in November, with the latter coming in slightly below expectations. Consumer spending increased 0.5% in both months, matching forecasts for November and continuing to outpace inflation. The personal savings rate declined modestly to 3.5% in November.

Within the inflation data, both goods and services prices rose 0.2% in November. Food prices were unchanged, while energy costs increased 1.9% after declining in October.

The inflation report coincided with other data pointing to continued economic strength. The BEA reported that GDP grew at a 4.4% annualized pace in the third quarter, according to its final estimate, while initial jobless claims remain near their lowest levels in nearly two years.

Taken together, the data suggest the U.S. economy continues to expand, supported by resilient consumer spending despite signs of a cooling labor market.

“The consumer continues to drive the U.S. economy, with today’s data pointing to another strong gain in spending,” said James McCann, senior economist for investment strategy at Edward Jones. “This resilience comes despite last year’s labor market slowdown and still-elevated inflation.”

Markets expect the Federal Reserve to keep interest rates unchanged at its policy meeting next week after three rate cuts in 2025. Futures pricing suggests policymakers may deliver no more than two additional cuts this year as they assess the impact of prior easing amid persistent inflation pressures.

POLITICS

Fed Governor Lisa Cook Appears Safe from Trump Firing After Supreme Court Arguments

Image courtesy of Nathan Howard via Reuters

Federal Reserve Governor Lisa Cook’s position appears increasingly secure after Supreme Court justices signaled strong skepticism toward the Trump administration’s effort to remove her, raising concerns about the potential damage to the Federal Reserve’s long-standing independence.

During arguments Wednesday, several justices questioned whether President Trump could fire a Fed governor “for cause” without meaningful judicial review, particularly when the allegations involve unproven conduct that occurred before Cook joined the central bank. Justice Brett Kavanaugh warned that the administration’s position could “weaken, if not shatter,” the Fed’s independence, while other justices expressed concern over the speed and process surrounding the attempted removal.

Cook sued the president last year after Trump moved to dismiss her over mortgage fraud allegations that have not resulted in criminal charges. Lower courts have so far blocked her removal, ruling that the Federal Reserve Act’s “for cause” standard likely refers to misconduct while in office. The Supreme Court is now considering whether to allow her termination while the case proceeds.

The dispute carries broader implications beyond Cook’s role. Legal observers say the outcome could shape how insulated the Fed remains from political pressure, particularly in setting interest rates. The stakes are heightened by the recent disclosure that Fed Chair Jerome Powell is under criminal investigation related to a headquarters renovation project, which Trump has linked to his frustration with the central bank’s rate policy.

Cook, who has denied wrongdoing, said after the hearing that the case centers on whether U.S. monetary policy will be guided by evidence and independent judgment or by political influence. Former Fed chairs and Treasury officials have filed briefs supporting her, warning that removing Cook would erode confidence in the central bank and threaten economic stability.

Competition is also coming from Amazon, which Bezos founded in 1994. Amazon has accelerated development of its own satellite network, recently rebranding Project Kuiper as Leo. The company has launched 180 satellites since April through missions handled by partners including United Launch Alliance and SpaceX, with future launches expected to use Blue Origin rockets.

Amazon ultimately plans to deploy 3,236 low-Earth orbit satellites to serve consumers, businesses, and government clients. An “enterprise preview” of the service opened to select users last November ahead of a broader commercial rollout.

Bezos founded Blue Origin in 2000 and has said he believes the company could eventually surpass Amazon in size. Dave Limp, formerly head of Amazon’s devices business, currently serves as Blue Origin’s CEO.

“I think it’s going to be the best business that I’ve ever been involved in, but it’s going to take a while,” Bezos said at The New York Times’ DealBook Summit in 2024.

Blue Origin has historically focused on rocket launches, including short suborbital flights carrying tourists and research payloads. In January, the company achieved a major milestone with the successful first launch of its New Glenn heavy-lift rocket, though it was unable to recover the booster for reuse.

EARNINGS

Intel Shares Slide 6% After Weak First-Quarter Outlook Despite Beating Q4 Estimates

Image courtesy of Ann Wang via Reuters

Intel reported stronger-than-expected fourth-quarter results on Thursday, but cautious guidance for the first quarter sent shares down as much as 6% in after-hours trading.

The chipmaker posted adjusted earnings per share of 15 cents, well above the 8 cents forecast by analysts. Revenue for the quarter reached $13.7 billion, exceeding Wall Street’s expectation of $13.4 billion.

Despite the beat, Intel projected first-quarter revenue between $11.7 billion and $12.7 billion, with breakeven adjusted earnings per share—falling short of analysts’ expectations of 5 cents per share on $12.51 billion in sales. The company also reported a net loss of $600 million, or 12 cents per diluted share, compared with a $100 million loss, or 3 cents per share, in the same period last year.

Investor optimism has driven Intel’s stock up 147% over the past year, fueled by hopes that the company could secure its first major anchor customer for its foundry business, which manufactures chips for other companies.

CEO Lip-Bu Tan highlighted that Intel’s 18A manufacturing technology, which competes with Taiwan Semiconductor Manufacturing Company’s 2nm process, “over-delivered” in 2025 and is now ready for volume production of products like the Core Ultra Series 3 processors. Tan emphasized that the company is “working aggressively” to expand 18A supply to meet high demand.

CFO David Zinsner said customers for Intel’s next-generation 14A technology are expected to appear in the second half of the year, but the company does not plan to announce them publicly. He added that first-quarter softness is partly due to limited supply ahead of seasonal demand.

Intel’s foundry business generated $4.5 billion in revenue, some of which reflects internal chip production. Meanwhile, the Data Center and AI segment posted $4.7 billion, up 9% year-over-year, as demand for AI infrastructure drives server chip sales. Laptop-focused Client Computing Group sales fell 7% to $8.2 billion.

The company also benefited from strategic investments in 2025, including from the U.S. government, SoftBank, and Nvidia. Intel completed a $5 billion stock sale to Nvidia during the quarter.

📉 ON THE MOVE AND NOTABLES 📈

✔️ U.S. equities were trading higher early Thursday after the Fed’s preferred inflation gauge, the PCE index, eased to 2.7% in November.

✔️ Headline PCE inflation slowed to 2.7% year over year in November, below expectations of 2.8%. Goods prices, up 1.4% from a year ago, have helped offset still-elevated services inflation, which eased to 3.4%.

✔️ Treasury yields are higher, with the 10-year yield at 4.26%.

✔️ Overseas, European equities are also moving higher, extending a rebound after President Trump canceled proposed tariffs tied to a Greenland agreement.

✔️ The U.S. dollar is weaker against major currencies.

✔️ Crude oil prices fell below $60 per barrel as geopolitical tensions eased.

✔️ Gold topped $4,900 an ounce for the first time.

✔️ The Russell 2000® Index outperformed the S&P 500 for a 13th consecutive session Wednesday, its longest streak since June 2008, signaling improving investor confidence in the domestic economy.

✔️ Natural gas futures surged amid expectations of sharply higher demand as a major Arctic cold front moves across the Midwest and Eastern U.S., even as supplies tighten. Shares of natural gas producers including EQT (EQT), Cheniere Energy (LNG), and Kinder Morgan (KMI) moved higher.

✔️ The Cboe Volatility Index (VIX) fell nearly 5% as geopolitical risks eased, drifting back toward 16 — still above late-2024 lows below 14.

✔️ Jobless claims rise modestly, below expectations – Initial jobless claims edged up to 200,000 last week, below consensus expectations of 207,000 and only slightly above the prior week’s 199,000. Continuing claims fell to 1.85 million, compared with forecasts for an increase to 1.89 million.

✔️ Trump continues to advocate for a 10% cap on credit card interest rates, a proposal facing strong opposition from bank executives who warn it could restrict credit availability and dampen lending.

✔️ Trump also said Wednesday that he is close to naming a replacement for Federal Reserve Chair Jerome Powell, suggesting he has largely settled on a single candidate. Speaking to CNBC at the World Economic Forum in Davos, Trump said the search that once included up to 11 candidates has narrowed to one in his mind, though he declined to identify that person.

✔️ Netflix shares fell despite narrowly beating earnings expectations. The company pointed to gains in subscribers, pricing, and advertising revenue, but investors focused on decelerating subscriber growth and softer forward guidance. Netflix said it surpassed 325 million subscribers in 2025 and announced it would pause share repurchases to help fund its proposed acquisition of Warner Bros. Discovery (WBD).

✔️ United Airlines (UAL) rose after reporting better-than-expected fourth-quarter results and issuing upbeat guidance.

✔️ Kraft Heinz (KHC) slid after the company disclosed that Berkshire Hathaway (BRK.A) may sell almost its entire stake in the company, representing roughly 27% of outstanding shares.

✔️ Johnson & Johnson (JNJ) fell despite delivering better-than-expected quarterly results and issuing guidance that topped analysts’ revenue and profit forecasts. With the stock up more than 30% over the past six months, investors may have already priced in much of the good news.

✔️ Arm Holdings (ARM) moved higher after Susquehanna upgraded the stock to positive from neutral.

✔️ Paramount Skydance (PSKY) announced on Thursday that it has extended the deadline for its bid to acquire Warner Bros. Discovery (WBD), while Warner Bros. continues to urge shareholders to approve its sale to Netflix (NFLX), as the high-stakes Hollywood drama shakes up the media landscape.

✔️ Facebook and Instagram parent company Meta on Wednesday said it will begin to show advertising on its Threads micro-blogging service to all users globally starting next week.

✔️ Bitcoin (/BTC) edged lower again early Wednesday and remained below $90,000. Prior to the latest geopolitical tensions, the cryptocurrency had been trading near two-month highs.

✔️ Micron (MU) rose after William Blair initiated coverage with an outperform rating.

✔️ Procter & Gamble (PG) slipped despite posting earnings above expectations, as revenue missed forecasts amid softer demand for certain consumer products.

✔️ GE Aerospace (GE) edged lower after reporting earnings and revenue beats, supported by strong jet-engine demand. With shares up roughly 70% over the past year, some positive news appears priced in.

✔️ Abbott Laboratories (ABT) fell after quarterly revenue missed estimates, though earnings per share exceeded Wall Street expectations.

✔️ Freeport-McMoRan (FCX) declined despite beating earnings and revenue estimates, as investors locked in gains following a sharp run-up ahead of results. The company reiterated its ability to supply copper to a growing market.

✔️ Tesla (TSLA) shares went higher after CEO Elon Musk said the company started robotaxi rides with no safety monitor present in the cars in Austin.

✔️ Alphabet (GOOGL) gained after Raymond James upgraded the stock to strong buy from outperform, citing improved long-term revenue prospects driven by Google Cloud and Search.

✔️ Moderna (MRNA) climbed further on Thursday, extending Wednesday’s nearly 16% surge, after the company and Merck (MRK) reported five-year data showing their melanoma vaccine reduced the risk of relapse or death, according to Barron’s.

💲What Else to Watch Ahead💲

🟢 January 23: Expected earnings from Booz Allen Hamilton (BAH) and Ericsson (ERIC). University of Michigan consumer sentiment survey final results for January.

🟢 January 26: Expected earnings from Baker Hughes (BKR), Steel Dynamics (STLD), and WR Berkley (WRB)

🟢 January 27: Consumer confidence, new home sales and expected earnings UnitedHealth Group (UNH), Boeing (BA), American Airlines (AAL), General Motors (GM), United Parcel Service (UPS), Northruop Grumman (NOC), Kimberly-Clark (KMB), HCA Healthcare (HCA), and RTX Corp (RTX), Seagate Technology (STX), and Texas Instruments (TXN).

🟢 January 28: Federal Reserve policy decision, and expected earnings from Microsoft (MSFT), Meta (META), Tesla (TSLA), IBM (IBM), Lam Research (LRCX), ASML Holding (ASML), AT&T (T), Amphenol (APH), Corning (GLW), GE Vernova (GEV), General Dynamics (GD), Raymond James (RJF), Starbucks (SBUX), Danaher (DHR), Progressive (PGR), Lennox (LII), Teva Pharmaceuticals (TEVA), Textron (TXT), and United Microelectronics (UMC).

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