Weekly Market Update (Jan 18, 2026)

Market Hedwig
2 days ago
2 min read

HIGHLIGHTS

The first week of Q4 earnings season reported solid results, while the stock performance is mixed.

Fed: Fed Chair Powell pushed back against the threat from DoJ criminal indictment, increasing the likelihood that he remains as Fed governor. The news has also reduced the likelihood of further dovish actions.

China: Export data has exceeded market expectation on stronger tech and AI shipments. Markets expect export figures to remain key growth driver, reducing the impact of domestic demand.

Japan: Policies would change depending on election results and currency reaction. If there is a clear ruling party defeat, it could diminish Takaichi’s priorities and give the Bank of Japan more independence.

MARKETS

Nasdaq	23,515.39	-0.66%
S&P 500	6,940.01	-0.38%
Dow	49,359.33	-0.29%
10-Year	4.23%	+6bps
Brent	64.13	+2.87%
DXY	99.38	+0.44%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: We see more evidence of AI monetization, such as TSMC earnings results this week. It is showing AI investment spending is solid and demand for compute remain strong. Investors confidence in tech companies has been boosted.

Morgan Stanley: As S&P500 remains concentrated, we are concerned that the progress for the mega-tech is no longer coming from multiple expansion but more from the earnings achievement.

Fixed Income

Standard Chartered: President Trump ordered to US agencies to buy $200b of mortgage-backed bonds. However, we still prefer 5-7Y US treasuries and short-duration high-yield bonds to lock in yields.

HSBC: US Treasury yields were up amid a busy corporate issuance slate and better than expected macro data. European government bonds were mostly steady.

Economy

UBS: We still believe that inflation should not be a barrier to Fed monetary easing. Additional weakness in job market is expected to result in rate cut at the end of Q1 2026.

J.P. Morgan: With lower rates and tariff uncertainty fading, the confidence among business leaders is growing this year. Companies are going to take advantage of the window for deal activity with these favorable conditions.

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.