Think Equity Morning Brief: Yen, Tariffs, Shutdown Risk Kick Off Busy Week
Morning Brief

Disclosures for Think Equity Morning Brief, January 23, 2026

Sources: Bloomberg LP; The Wall Street Journal

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(Bloomberg) -- Stocks are set to open cautiously at the start of a big week of calendar events, including the Fed's rate decision and four of the Mag 7 reporting results. Canada is the latest target of Trump's tariff threats, while the risk of another government shutdown is rising.

S&P 500 futures were down 0.2% as of 5:27 a.m. in New York, while Nasdaq 100 contracts were -0.4%. Trump threatened Canada with 100% tariffs on exports to the US if it made a trade deal with China. Canada said efforts to diversify trade away from the US won't be derailed. The working week starts with travel chaos and unprecedented pressure on power grids after the worst storm in years. Natural gas futures jump.

Traders are also monitoring the possibility of a partial government shutdown. Senate Democrats have insisted that funding for the Department of Homeland Security be split off until Congress can agree on new guardrails for immigration enforcement, after agents killed two US citizens this year in Minnesota. Senate Republican leaders plan to reject the demands.

The biggest market action on Monday is in currencies and precious metals. The dollar hit a four-month low as speculation swirled that the US could coordinate intervention with Japanese authorities to support the yen. Such a move would likely be interpreted as a sign that Trump wants a weaker dollar generally. Gold, priced in dollars, rose above $5,000 for the first time on haven buying, while silver also jumped to a record.

The busiest week of the earnings season is kicking off, with companies accounting for more than a third of the S&P 500's total market value due to report. Results from Meta Platforms Inc. (META:NASDAQ), Meta Platforms Inc. (META:NASDAQ), Tesla Inc. (TSLA:NASDAQ), and Microsoft Corp. (MSFT:NASDAQ)will be dissected to see how their massive spending on AI is translating into profits. Earnings from Rtx Corp. (RTX:NYSE), Lockheed Martin Corp. (LMT:NYSE), and Northrop Grumman Corp. (NOC:NYSE) will likely reflect increased demand for weapons amid geopolitical tensions.

Deutsche Bank strategists note that equity positioning has broadly trended sideways while discretionary positioning continues to rotate out of mega-cap growth and tech and into cyclicals. Strategists at JPMorgan said that early indications from earnings season suggest growth broadening across sectors outside tech. Goldman Sachs similarly expects earnings growth beyond the biggest stocks to drive a continued broadening in the stock market.

In corporate news, SoftBank Group Corp. (SFTBY:OTCMKTS) is said to have halted talks about an acquisition of U.S. data center operator Switch (SWCH:NYSE), while the WSJ reported that Merck & Co. Inc. (MRK:NYSE) is no longer in talks to buy biotech firm Revolution Medicines Inc. (RVMD:NASDAQ) after the pair failed to agree on a price. Samsung Electronics Co. Ltd is getting close to securing certification from Nvidia Corp. (NVDA:NASDAQ) for the latest version of its AI memory chip, narrowing the gap with rival SK Hynix (KRK:000660).

Sarepta Therapeutics Inc. (SRPT:NASDAQ) shares are higher in premarket trading ahead of a call to report three-year data from its study of a treatment for Duchenne muscular dystrophy.

Earnings: No major companies are due to report today. Of the 64 S&P 500 companies to have reported so far this earnings season, slightly more than 78% have beaten analysts' forecasts, while just over 14% have missed.

Economy: The Chicago Fed's national activity index, and readings of durable and capital goods orders, all for November, are due at 8:30 a.m. ET. They will be followed at 10:30 by the Dallas Fed's manufacturing activity index for January.

Equity Insights:

• Collective net sales of U.S. single stocks by hedge funds hit the highest in four weeks, driven by short sales outpacing long buys by a ratio of 1.7 to 1, according to the Prime Trading desk at Goldman Sachs.
• Another near-record bout of call trading might have helped the S&P 500 erase a 2% drop last week to close almost flat. And yet, the broader boost to stocks from the options trade seems more muted than in previous episodes.
• Derivatives strategists at UBS and BBVA are touting rebound plays in LVMH, as the weakness in luxury stocks has created an attractive entry point for tactical long call option plays.

 Sectors in focus:

• Shares in airlines, natural gas, and power utility firms will be in focus as an intense winter storm in the U.S. causes widespread flight cancellations and power outages.
• Precious metals miners may be active as gold surges past $5,000 an ounce for the first time.
• Rare earth companies are in focus following a Financial Times report that the Trump administration is planning to invest $1.6 billion into USA Rare Earth Inc. (USAR:NASDAQ), citing unidentified people familiar with the matter.

US Premarket Movers of Note:

• USAR US (+62%), NB US (+14%), CRML US (+7.5%), MP US (+5.9%): USA Rare Earth Soars on Report of U.S. Government Mulling Stake
• SRPT US (+10%): Sarepta Plans to Report Elevidys Data Update Monday
• TCPC US (-8.7%): BlackRock Cuts Value of Private Debt Fund by 19%, Waives Fee
• RVMD US (-25%): Merck Ends Talks to Acquire Revolution Medicines, WSJ Reports

M&A:

• CVC Capital Partners agreed to buy Marathon Asset Management as part of efforts to widen its footprint in U.S. credit markets, the latest example of consolidation among alternative investment firms.
• SkyWater Technology shares rise as much as 11% in premarket trading after the WSJ reported that quantum-computing company IonQ has struck a deal to buy the chipmaker for about $1.8 billion.

Macro:

• Congressional Republicans showed signs of wavering on Trump's immigration crackdown in the wake of another shooting of a U.S. citizen in Minnesota.
• New York Mayor Zohran Mamdani said he'll do everything in his power to prevent "horrific" actions by federal immigration officers, one day after officers shot and killed an American nurse in Minneapolis.
• Scott Bessent suggested that Canadian PM Mark Carney did an "about-face" by striking a deal with China to lower some trade barriers, reinforcing Trump's latest tariff threat against Canada.
• Zelenskiy said progress had been made during talks aimed at ironing out the possible parameters for ending Russia's full-scale invasion of Ukraine, although such a deal still requires compromises from all sides.

Europe/Asia:

Europe Trading: European stocks were muted, with the travel sector dropping as travelers faced disruptions from a massive winter storm sweeping across the US. Mining shares outperformed, tracking record commodity prices.

Asia Trading: Asian stocks were mixed in choppy trading as gains in technology and material shares offset a slump in Japan, where a spiking yen hit exporters. The MSCI Asia Pacific Index rose as much as 1.1% in early trading before paring the advance. MediaTek and Tencent provided some of the biggest contributions. 

Other Company News:

• US Winter Storm Triggers Most Flight Cancellations Since Covid
• White House Pushes Quick Repairs to Revive Venezuela Oil Output
• Investors Hedge China, Tech Risks Amid Trump TACO Trade Drama
• Texas Deep Freeze Shutters Some Energy-Consuming Industry Sites
• Morgan Stanley Prepares to Enter Japan Spot Power Trading Market
• Lawsuit Claims Meta Can See WhatsApp Chats in Breach of Privacy
• US to Invest $1.6 Billion In USA Rare Earth: Financial Times
• Waymo Probed by US Safety Agency Over Austin School Bus Mishaps
• Blackstone Units Make Open Offer for Aadhar Housing Finance
• United Airlines to Begin Restoring Flight Operations Monday
• Noble Corporation Secures $1.3 Billion In New Contracts
• PJM Releases List of Power Plants With Suspended Emission Limits

Economic Data (All Times ET):

• 8:30 am: United States Nov Chicago Fed Nat Activity Index, est. -0.2, prior -0.21
• 8:30 am: United States Nov P Durable Goods Orders, est. 3.75%, prior -2.2%
• 8:30 am: United States Nov P Durables Ex Transportation, est. 0.3%, prior 0.1%
• 10:30 am: United States Jan Dallas Fed Manf. Activity, est. -8.6, prior -10.9

Main Rating Changes:

Upgrades:

• Corpay Raised to Overweight at Morgan Stanley; PT $379
• Meta Raised to Buy at Rothschild & Co Redburn; PT $900
• Netflix Raised to Accumulate at Phillip Secs; PT $100
• Solventum Raised to Overweight at KeyBanc; PT $97
• Stewart Information Raised to Outperform at KBW; PT $81

Downgrades:

• Amazon Cut to Accumulate at Phillip Secs; PT $290
• Clearwater Analytics Cut to Neutral at UBS; PT $24.55
• Hecla Mining Cut to Hold at Canaccord; PT $26.50
• Varonis Systems Cut to Equal-Weight at Morgan Stanley; PT $41

Initiations:

• AAR Rated New Neutral at Goldman; PT $121
• AMD Reinstated Buy at William O'Neil
• BKV Rated New Buy at William O'Neil
• Compass Rated New Overweight at JPMorgan; PT $15
• Dutch Bros Rated New Buy at Citi; PT $82
• Exponent Rated New Overweight at JPMorgan; PT $100
• Verra Mobility Rated New Neutral at JPMorgan; PT $25
• Xylem Rated New Outperform at William Blair