After-Hours % Gainers

After-Hours % Losers

Closing Volume

- NYSE volume 23% above its one-month average;

- NASDAQ volume 63% above its one-month average;

- VIX index: up 5.19% to 16.81

Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

S&P 500 Heat Map

PJM

Doug always nice to see your writings, lyrics etc. about the Grateful Dead over the years. We were lucky to have Bob Weir, Phil Lesh and Donna keeping GD music alive for about 30 years after Jerry died. I saw the band over 100 times from 1980 to 1990. Met Bob a few times and was lucky to have him and his band Ratdog perform at a venue I owned. It was the second to last show before Bob ended Ratdog. A small event for 180 people after their Beacon theater show. When I asked his road manager if Bob would like any catering before he went on stage, he said "just a bottle of red wine." I said would he like a nice bottle of Cabernet, his manager said "any kind of red wine is fine, he doesn't care, he's very low maintenance." Was quite the memorable night and Bob was as cool and easy going as one would expect.

Break in!

Nvidia  (NVDA)  is moving lower on word that OpenAI will use Cerebras chips.

Tomorrow morning's earnings calendar brings more financials.

I have added to my  (UNH)  long ($337.50).

- NYSE volume 17% above its one-month average;

- Nasdaq volume 69% above its one-month average;

- VIX index: up 11.01% to 17.74

Here is a great response from my old and dear friend Dan Greenhaus — to a tweet about his appearance recently on CNBC:

I am further trimming  (PG)  and  (PEP)  — now small-sized from very large (PEP) two days ago.

I plan to buyback on profit taking/weakness.

Speaking of the strength in consumer non durables ( (PG) ,  (KMB)  and  (PEP) ) - one of my favorite Surprises is in boldface:

Surprise #3: The AI economy and (a heavily weighted and imbalanced) stock market dependent on AI show signs of interruption, then disruption

The AI bubble bursts as the circular financing deals unwind (or are pushed out) — AI capital spending slows abruptly as return on investment concerns emerge as power generation and grid modernization are bottlenecks. Depreciation charges and lower demand wrecks havoc with consensus AI 2026-27 earnings per share expectations. Another big AI surprise would be if China decides to flood markets with inexpensive AI models — pressuring the ultimate and expected robust ROI forecasts (which are already in question by some skeptics).

OpenAI's Sam Altman finds a place to live right next door to Sam Bankman-Fried. His effort to make OpenAI too big to fail, fails. ChatGPT turns out to at best be a commodity large language model purveyor. It becomes obvious to all that its recent $500 billion-plus valuation can’t be supported. Without an ability to do a down round without losing face, OpenAI loses all access to capital. Ultimately, a consortium of its customers and suppliers takes it over to modify its business plan and reduce the cash burn.

With Altman tossed to the curb (or worse), the prosecutions begin.

OpenAI’s problems pushes a deeply committed (to OpenAI) Softbank to the verge of collapse.

Nvidia shares fall by -40% as CoreWeave (CRWV) is driven into bankruptcy.

A basket of defensive consumer nondurable equities ( (PEP) , (KO) , (PG) and (KMB) ) materially outperform the Mag 7 by a decisive amount.

The shares of (boring and previously hapless) PepsiCo outperform most other staples and 90% of the S&P Index after a much better skein of organic unit growth and as its core business is rationalized.

As I often do, I am trading around core positions.

Trimming some staple holdings:

*  (PEP) $145.45 (+$9 from last week's lows!)

*  (PG)  $146.62

I plan to buy back on weakness.

From Peter Boockvar:

Very quick inflation comment

November data is old news and why I’m not writing a full piece here on PPI and retail sales. I do want to point out though that within PPI, core goods prices were up 3.2% y/o/y and that is before the 5% further increase in the CRB raw industrials index since November. The inflation debate is not settled as I’ll argue again that while service inflation at the consumer level will further slow but goods price deflation is over.

The question with the rising producer price pressures is what can be passed on and what has to be eaten particularly those who need to procure industrial metals.

Core Goods Prices y/o/y

With S&P cash -42 handles I have taken in my short Index calls (put on at the close of trading yesterday) - for a quick profit.

I wanna tell you how it's gonna be

You're gonna give your love to me

I wanna love you night and day

You know my love will not fade away

You know my love will not fade away

Not fade away

My love's bigger than a Cadillac

I try to show you but you drive me back

Your love for me has got to be real

You're gonna know just how I feel

Love's real, not fade away

Not fade away

- Grateful Dead - Not Fade Away (Orchard Park, NY 7/4/89) (Official Live Video)

I have been writing my column for nearly three decades. In those writings, music has played a large role.

As I recently wrote:

The German philosopher Friedrich Nietzsche once said that “without music, life would be a mistake.” Nietzsche's quote is often attributed to his work Twilight of the Idols, which highlights music's vital role in human existence, emotion, and meaning, suggesting life lacks depth and joy without it. He saw music, as I do, as a way to uplift, express the inexpressible, and connect to deeper truths beyond mere language.

Since the late 1990s, when I began to write for TheStreet, no band has been referenced more - in my Diary - than The Grateful Dead.

In my life I have attended about 80 Dead concerts. But, in the world of Dead Heads, I am a rookie!

I even saw The Grateful Dead at Woodstock, The Music Festival at Max Yasgur's farm. They were introduced with these words: "One of the greatest fucking rock groups in the world - The Grateful Dead."

Here is their complete Woodstock set: Grateful Dead @ Woodstock (Full Set, 1969)



Dead Heads inhabit many areas of life - even the Federal Reserve Chairman, Jay Powell, is a Dead Head:

Deadhead Jerome Powell

Music Is Love

"Chances are I've spent more time standing on stage playing guitar and singing than any human that ever lived."

- Bob Weir

I wrote the following column in December, about one month before Bob Weir's From the archives: The Grateful Dead’s Bob Weir passing:

It's All a Dream We Dreamed One Afternoon Long Ago

Look into any eyes you find by you

You can see clear through to another day

Maybe it's been seen before through other eyes

On other days while going home

What do you want me to do

To do for you to see you through?

It's all a dream we dreamed

One afternoon long ago

Walk into splintered sunlight

Inch your way through dead dreams to another land

Maybe you're tired and broken

Your tongue is twisted with words half spoken

And thoughts unclear

What do you want me to do

To do for you to see you through?

A box of rain will ease the pain

And love will see you through

Just a box of rain, wind and water

Believe it if you need it

If you don't, just pass it on

Sun and shower, wind and rain

In and out the window

Like a moth before a flame

And it's just a box of rain

I don't know who put it there

Believe it if you need it

Or leave it if you dare

And it's just a box of rain

Or a ribbon for your hair

Such a long, long time to be gone

And a short time to be there

- "Box of Rain" (Performed by The Grateful Dead and written by Robert Hunter and Phil Lesh)

This week marks my 28th year writing for multiple iterations of TheStreet.com. I write because I enjoy it not because I need to.

 The nearly three decades have been characterized by changes in management and editorial teams, a number of different owners (starting with the iconic Jim "El Capitan" Cramer, who started it all), plenty of corporate name makeovers and, perhaps most importantly a transformation in market structure from active investing to passive investing. I have tried to give it my all — waking up at 4 a.m. to get a start on the day, writing late in the evening when there are breaking events or developments and even writing outlines of my week's openers during the weekends. As I start outlining my Surprises for 2026 and I get older, I get more sentimental. It is only natural. And the events of the last few days have made me even more emotional and introspective:

I am aware of only a few writers that have written in the same spot for nearly 30 years consecutively.

Writing comes easy for me, while, sometimes, other parts of my life are not so easy.

But, importantly, what my Diary has brought to me is more important than I think I have brought to subscribers. I have been the recipient of many important personal relationships (like TLR, Smails and Johnny The Greek, among others) that transcend markets and politics. 

You all would be very surprised how many subscribers I text or direct message on Twitter (X) daily. It is this that I am so grateful for. Along with the friendships have come tragedies. The loss of Bill Meehan and Chuck "Brown Bear" Zion in the World Trade Center attack on 9/11. The deaths of legendary Sir Arthur Cashman, Byron Wien, Joe Rosenberg and Vince Farrell come to mind also. 

"What do you want me to do To do for you to see you through?" 

As to the columns, I have tried to deliver value-added non-consensus views, outlooks, forecasts that don't resemble the herd. I have always felt the bullish case dominated the business media and was easy to access — the skeptical case not so much. I wanted to deliver the contrarian case with strong analytical support and common sense reasoning. Increasingly, I have been critical of mainstream Fin TV, because I feel they are letting viewers down. I will continue to call out the B.S. and recommend ways in which the business media can be better. I recognize that the best ideas are hammered out on the anvil of dissent, debate and discourse — so I try to be open minded. I have received my share of public criticism (some deserved) but my skin is thick after all these years. And when the criticism is constructive, thoughtful and justified I listen... carefully. And I try to modify and get better — recognizing that I don't have the concession on the truth. I am honest with our subscribers. I take ownership of my investment boners and don't sweep them under the rug. I time stamp my trades and investments. I have tried to shroud my writing with humor and pop culture — in order to make dry ideas more digestible. And of course my Diary is populated by a lot of music: The German philosopher Friedrich Nietzsche once said that “without music, life would be a mistake.”

Nietzsche's quote is often attributed to his work Twilight of the Idols, which highlights music's vital role in human existence, emotion, and meaning, suggesting life lacks depth and joy without it. He saw music, as I do, as a way to uplift, express the inexpressible, and connect to deeper truths beyond mere language. Perhaps the American cartoonist Charles M. Schulz (of Peanuts fame) put the role of music in our lives even better: Thank You! 

Throughout the last 28 years we all have had a set of cherished, personal and shared reference points, common memories and experiences. Thanks, as always, for reading my musings and missives over the years — I think I have a few good years that still lie ahead. "Such a long, long time to be gone And a short time to be there" ***

Have a Grateful Day!

(PG) ,  (KMB)  and  (PEP)  doing there thing.

From JPMorgan:

US: Futs are lower with NDX lagging and RTY flattish as Equities react to geopolitics and rotate internationally. Pre-mkt, bond yields are down 2-3bp, USD is off a touch, and cmdtys remain the best performing asset class. Precious metals remain the standout with Gold +1% and Silver +4% but WTI/Natgas are leading Energy with Ags also bid. In Equities, Mag7 names are all lower with Semis also getting hit but Cyclicals are leading Defensives with pre-mkt strength in cmdty-related Equities, Fins, and Industrials seeing pockets of strength. Today’s macro focus is on PPI, Retail Sales, and Existing Home Sales.

and...

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

A choppy start to the week and the volume of panicky questions was enough to make one forget that we closed 22bp below ATHs. The under the surface moves were significant roiled by headline risk, e.g. GOOG AI baskets vs. OPENAI basket had a 497bp spread yesterday. The geopolitical headlines are unlikely to stop in the near-term. A few thoughts on the markets:

· CREDIT CARD CAPS – To institute interest rate caps, a new law would have to be passed, and Trump does not currently have the votes in the GOP per comments from Thune & Johnson (Politico); further, it is unlikely that Dems would attempt to gift Trump a win during an election year. We think this is a buy-the-dip moment for the credit cards and banks with credit card exposure; most major credit card companies have lost at least 5% this week and the BKX has fallen ~2.5%.

o [BLOOMBERG TERMINAL HEADLINE] HASSETT: STUDYING DIFFERENT OPTIONS ON CREDIT CARD INTEREST CAP

o In the event that we are wrong on this we look for the market to reverse lower as the growth and earnings outlook are revised lower across the Street. Capping credit rates would limit credit and hurt credit scores. An example, a person with a $10,000 credit card limit with a $2,500 balance. If their rate moves from 29.99% to 10.00%, the issuer may choose to reduce their credit limit to their balance. Not only does that erode $7,500 in purchasing power but given that credit utilization is now 100% on that card, the individual’s credit score would decline. Further, the issuing company could choose to cancel the card further hurting spending potential and credit scores.

· CREDIT CARD SWIPE RATES – Trump has revived a push to pass the Credit Card Competition Act of 2023 (NerdWallet). This led to MA / V underperforming peers yesterday as the market narrative shifted from caps to increased competition. Similar to rate caps, this would require a new law to be passed it seems unlikely that there is enough support to push this through.

· YESTERDAY’S MACRO DATA – Among the highest volume of client questions included one that surrounded what the CPI print means for PCE. Our colleague Mike Hanson tells us that JPM Econ are looking for a 0.41% MoM increase for December’s Core PCE print which maps to 2.9% YoY. This measure will be impacted by today’s PPI print, though this is Oct/Nov data.

· TODAY’S MACRO DATA – For PPI, Feroli sees Headline PPI printing 0.3% MoM (2.7% YoY) vs. 0.2% survey (2.7%) and Core PPI printing 0.2% MoM (2.7% YoY) vs. 0.2% survey (2.7% YoY). For home sales, Feroli thinks we see an increase for Dec, printing 4.2mm homes which would the fourth consecutive monthly increase and the highest level since Feb 2025. Regarding Retail Sales, Feroli is above the Street, seeing Headline printing 0.8% vs. 0.5% survey; ex-Autos_Gas printing 0.8% vs. 0.3% survey.

UBS analyst Peter Grom lowered the firm's price target on Procter & Gamble to $161 from $176 and keeps a Buy rating on the shares. The operating environment and market backdrop for Consumer Staples remains challenging, but fundamentals could improve in 2026, the analyst tells investors in a research note.

UBS lowered the firm's price target on Kimberly-Clark to $107 from $132 and keeps a Neutral rating on the shares. The operating environment and market backdrop for Consumer Staples remains challenging, but fundamentals could improve in 2026, the analyst tells investors in a research note.

Upside:

-BEEM +17% (reports prelim revenue)

-TGTX +9.4% (earnings, guidance)

-CLOV +8.3% (announces 53% Growth in Medicare Advantage Membership during AEP; Expects First-Ever Full Year GAAP Net Income Profitability in 2026)

-GSIT +7.7% (enters POC for Sentinel perimeter security system)

-CLSK +6.4% (acquires 447 acres of land for Texas data center)

-IBRX +6.4% (Saudi FDA Grants Accelerated Approval to ANKTIVA In Combination with Checkpoint Inhibitors for Metastatic Non-Small Cell Lung Cancer)

-ADNT +4.1% (UBS Raised ADNT to Buy from Neutral, price target: $30 from $22)

-KULR +4.0% (awarded 5-year Preferred Battery Supply Agreement from Caban Energy)

-INTC +2.9% (US govt has posted license review rule for semiconductor exports to China and Macau)

-BABA +2.7% (recent notable strength being attributed to investor excitement over Qwen AI offerings ahead of a product event on Thursday, Jan 15th)

-HII +2.7% (awarded Missile Defense Agency's SHIELD Contract to Advance Homeland Defense with a ceiling of $151B)

-HON +2.2% (Quantinuum to file for IPO)

Downside:

-TCOM -15% (China market regulator reportedly probes Trip.com over suspected monopoly)

-XAIR -15% (files to sell $5M Private Placement Priced At-the-Market under Nasdaq Rules)

-GKOS -12% (earnings, guidance)

-HNRG -11% (prices $50M stock offering at $18/shr for 2.78M shares)

-RIVN -2.8% (UBS Cuts RIVN to Sell from Neutral, price target: $15 from $13)

-WFC -2.7% (earnings, guidance)

Treasury Auctions:

11:30 a.m.: Treasury hosts a $69B 17-Week Bill Auction;

2:00 p.m.: Treasury buyback (liq support);

Fed Speakers:

9:50 a.m.: Fed Bank of Philadelphia President Paulson (Voter) speaks on the economic outlook before the Chamber of Commerce for Greater Philadelphia State of the Economy event, Philadelphia, PA (Text available. No Q&A. No livestream);

10 a.m.: Fed Board Governor Miran (Voter) speaks on "Regulations, the Supply Side, and Monetary Policy" before the Delphi Economic Forum Lecture event, Athens, Greece (Text available. Q&A from moderator. Webcast TBA);

12 p.m.: Fed Bank of Minneapolis President Kashkari (Voter) participates in virtual town hall conversation hosted by the Wisconsin Bankers Association, Minneapolis, MN (Audience Q&A expected. No media Q&A. No text. Livestream at minneapolisfed.org. Event information);

12 p.m.: Fed Bank of Atlanta President Bostic (Non-Voter) participates in moderated discussion on the economy as part of the Atlanta Business Chronicle 2026 Economic Outlook event, Atlanta, GA (No audience Q&A. No media Q&A. No embargoed text. Livestream at Youtube.

2:10 p.m.: Fed Bank of New York President Williams (Voter) gives opening remarks before "An Economy That Works for All: Financial Inclusion" event organized by the Federal Reserve Bank of New York (Virtual access available. No text. No Q&A); Event information: www.newyorkfed.org

4:50 p.m. New York Federal Reserve Bank First Vice President and COO Sushmita Shukla gives closing remarks at "An Economy That Works for All: Financial Inclusion”

Economic Calendar for the Week

* Look for the large cumulative rise in prices (over the last five years) to bleed into higher income stratas, causing a downturn in domestic economic activity and an adverse stock market reaction...

Surprise #1: War breaks out throughout the world, Trump resigns and equities decline by more than 20% in 2026

I won't bury the lede.

President Trump, like The Godfather's Michael Corleone, becomes a wartime President — initially with no opposition in his Cabinet or in Congress (and without a wartime consigliere like Tom Hagen to smooth things over!)

”Goddamn it, if I had a wartime consigliere... a Sicilian...“ ｜The Godfather

After attacking Venezuela and failing to learn the expensive lessons of regime change attempts with Iraq and Afghanistan, Pres. Trump sees his popularity plummet. Like Corleone, Trump grows more unhinged and the Administration's rhetoric against Mexico's President (Claudia Sheinbaum Pardo) becomes more heated. Pres. Trump gives the Mexican President an ultimatum as an attack on that country is openly discussed on Truth Social. Other regimes, like that of Cuba's Miguel Diaz-Canel's (whose security forces are behind the protection of Venezuela's President Maduro), are also highlighted by the Administration as possible targets early in the year. With the cover of U.S. aggression, Russia becomes more aggressive against Ukraine (there is no peace) and China invades Taiwan in late summer.

Separate from geopolitics the Epstein files uncover a deeper (and unsavory) relationship with Pres. Trump.

A week long investigative report entitled "Trump First (Not America First") by The Washington Post discloses how much the Trump family has profited from his Presidency. President Trump's base is fractured — his popularity moves to unprecedented and low depths as the Marjorie Taylor Greene-led America First movement permeates both political parties.

Several high-level Trump Administration resignations are announced in the first half of 2026. A number of senior Republican Senators and Congressman distance themselves from the President.

By mid-year impeachment is openly discussed. Surprisingly, four women — Marjorie Taylor Greene, Elise Stefanik, Alexandria Ocasio-Cortez and Elissa Slotnick — emerge as the leaders of their respective political parties. Georgia's Congresswoman Marjorie Taylor Greene doesn't disappear — just the opposite occurs. Greene becomes the titular leader of the "America First" movement of the Republican Party, which is at odds with MAGA:

The "America First" movement gains ever more prominence and popularity within the Republican Party. Marjorie Taylor Greene overtakes Vice President JD Vance in the polls as the likely next Republican Presidential Nominee. New York Congresswoman Alexandria Ocasio-Cortez takes a large lead in the polls to be the next Democratic Presidential Nominee. Michigan Sen. Elissa Slotnick becomes the leading moderate in the Democratic party.

New York Congresswoman Elise Stefanik (who, after stepping down from Congress, breaks with Pres. Trump and announces that she plans to run for Sen. Schumer's NY Senate Seat), becomes another important leader in the "America First" faction of the Republican Party, joining the growing ranks of her party who finally split ranks with Pres. Trump.

Another woman is in the limelight — as First Lady Melania Trump begins divorce proceedings against Pres. Trump. (This was a surprise last year that was wrong....) The divorce settlement is nearly $1 billion, calling further attention to how Trump has profited from his presidency. Pres. Trump unexpectedly resigns under the intense political, social (Epstein) and mainstream media pressure citing his deteriorating health as the reason.

Despite all of the Administration's woes (and that of the domestic economy), the Democratic Party fails to offer a coherent alternative message as the Party remains hostage to the Left. (New York City Mayor Zohran Mamdani, Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez denounce the apprehension of Venezuela President Maduro.)

In a surprise (considering all of the above factors adversely impacting Republicans), the Democratic Party (barely) wins a narrow majority in the House. The U.S. economy weakens as the year proceeds. By year's end unemployment rises above 5% and the consumer price index is back near 4%.

The 2026 deficit approaches a staggering $2.5 trillion (and U.S. debt exceeds $40.5 trillion).

A recession in 2027 appears likely.

Equities (led by the Magnificent Seven tech stocks) succumb to slowing economic and corporate profit growth, the reappearance of inflation, questionable foreign and domestic policy, growing political uncertainties, emerging "problems" for the hyperscalers (as AI capital spending plans are reduced) and elevated valuations.

The K-shaped economy's weakness in the lower income cohort spreads into the middle and upper middle class as the cumulative (or stacked) inflation since Covid finally has an impact — causing a spending freeze. With the outlook for global economic growth dissipating, consumer and business sentiment plummets. BNPL and credit defaults rise and auto repossessions increase dramatically.

Drawdowns in the global equity markets and a moribund housing market contribute to a negative "wealth effect" and an air pocket with the high end consumer as the investor optimism of 2023-25 is abandoned.

There is no place to run, no place to hide — most asset classes fall in the 2026 Bear Market.

Precious metals, commodities and crypto currencies all collapse (after a strong start early in the year) — in Martha Reeves' Revenge.

Bottom line: After starting the year positively, the S&P Index drops by more than 20% in 2026 — with three separate drops of -10%

- My 10 Surprises for 2026 Doug's Daily Diary - TheStreet Pro

And, as noted yesterday (in referencing Rosie's tweet below), market observors are likely misinterpreting the strength of the U.S. economy:

Bonus — Here are some great links:

A Lot of Bullish Patterns

No Santa, No Problem

Angry Consumers. Happy Stocks.

OpEx Improving

The S&P Short Range Oscillator is getting more overbought at 3.61% vs. 2.96%.

At around the market's closing (and coincident with a late-afternoon rally from -30 handles to -14 handles), I re-shorted the indices (wash, rinse and repeat):

Scaling Back Into Index Shorts

With S&P cash -14 handles, I am scaling back into index shorts — via short calls.

Position: Short SPY calls (VS), QQQ calls (VS)

By Doug Kass Jan 13, 2026 4:02 PM EST