Marketbriefing 12. - 16. January 2026

MILF Weekly Report

The week of January 5-9, 2026, delivered moderate gains across global markets, bolstered by cooling inflation data, low jobless claims, and anticipation of a Federal Reserve rate cut, though rising Treasury yields and crypto volatility introduced caution. U.S. indices advanced, with tech and energy sectors leading, while utilities and healthcare lagged. European markets showed resilience amid ECB policy optimism, and Asian indices varied with stimulus hopes in China offsetting yen strength pressures.

The S&P 500 rose 1.6% to close at 6,966.3, nearing its all-time high of 6,966.3 from January 9, supported by rotation into value stocks. The Dow Jones Industrial Average gained 2.3% to 49,504.1, driven by financials and industrials. The Nasdaq Composite increased 1.9% to 23,671.3, led by selective rebounds in AI-related tech despite broader valuation concerns. Overall, U.S. resilience was highlighted, noting positive seasonality and Fed cut expectations amid delayed jobs data.

European Markets:

Indices posted gains on stable inflation and manufacturing data. The FTSE 100 rose 1.1%, aided by energy stability. Germany's DAX advanced 1.8% on positive PMI figures, while France's CAC 40 gained 1.1%. The MSCI EAFE Index climbed 1.4%, emphasizing global transformations and ECB meeting anticipation. Trade concerns lingered, but broader sentiment remained upbeat.

However, challenges persist in Germany, where Net Zero policies are de-industrializing the economy, leading to sky-high energy costs, collapsed productivity, factory closures, and job losses. Emissions are already nearly 50% below 1990 levels, yet demands for further reductions continue, exacerbating economic pain.

Asian Markets:

Performances were mixed, with emerging markets benefiting from commodity trends. Japan's Nikkei 225 edged up 2.3%, supported by exports despite Bank of Japan hike signals.

China's Shanghai Composite rose 0.3% on AI optimism and property stabilization, while Hong Kong's Hang Seng gained over 1%. Korea surged 6.5% on tech strength, but India dipped 2.5%. Carry trade pressures from yen appreciation were noted.

Sector Performances:

Winners: Materials up 4.8%, fueled by commodity rebounds, followed by Consumer Discretionary at +5.8%. Information Technology and Energy both up 1.9%, driven by AI rebounds and oil disruptions. Financials rose 1.4% on rate-cut bets.

Laggards: Utilities plummeted 1.6% amid yield spikes, Healthcare fell 1.1%, and Real Estate declined 0.5%. Morningstar's update underscored rotation dynamics, with Materials and Consumer Discretionary as standouts.

Top Performers:

Broadcom ($AVGO) surged on chip demand, Intel ($INTC) on CES announcements, and Chevron ($CVX) up 5-6% on Venezuela oil potential. In larger caps, Nvidia ($NVDA) and McDonald's ($MCD) outperformed in consumer sectors. Ross Stores ($ROST) also shone post-earnings.Venezuela - Oil Prices Declining?

Outlook for the Upcoming Week (January 12-16, 2026)

January's second week aligns with strong historical seasonality (S&P averages +1.3%), but volatility looms from the FOMC meeting on Wednesday, with an 86% chance of a 25bp rate cut. Key data includes job openings, PPI, trade balance, and unemployment claims, potentially influencing Fed dot-plot and liquidity signals. Earnings spotlight: GameStop (Tuesday), Oracle (Wednesday), Broadcom (Thursday), amid AI hype and cash strategy speculation.

The second week of January could turn volatile, with the focus on inflation data and the start of earnings season.

Historically strong January seasonality (+1.3% average S&P return) is running into December CPI figures and tariff-related decisions/judgments.

Bullish tailwinds: Extension of the Santa rally, ongoing buybacks, continued AI hype.

Risks: Higher-than-expected inflation (December CPI expected at 2.7%), earnings disappointments, geopolitics (Venezuela, tariffs).CB decisions and China's macro releases add global layers. Bullish tailwinds include Santa Claus rally potential, reduced volatility, and buybacks, though dovish surprises could pressure yields. On X, sentiment focuses on inflation gauges and AI events to offset bubble fears.

Political Tensions

Maduro captured, opening doors for investments in the world's largest reserves. Trump ended plans for second attacks, crediting cooperation from the interim government. Exxon CEO calls Venezuela "uninvestable" despite White House interest. Oil prices stable, but geopolitics weigh. The US will immediately begin refining and selling up to 50 million barrels of Venezuelan crude oil indefinitely, leveraging US refining capacity built for Venezuelan heavy crude.

Credit Card

1. Credit Cards in the USA

Credit cards are a cornerstone of consumer finance, enabling short-term borrowing but often leading to high-interest debt. As of Q3 2025, total credit card balances reached $1.23 trillion, up 5.75% year-over-year. The average balance per cardholder with unpaid debt was $7,886, a 2.8% increase from early 2025. Interest rates average around 20-25% APR for revolving balances, far higher than other loans, subsidizing perks like rewards programs for those who pay off monthly.

Skeptically, these figures might understate risk: Delinquency rates are rising (e.g., 3-4% for cards), signaling stress from inflation and job market shifts. Banks profit heavily here—interchange fees and interest make up ~30-40% of revenue for issuers like JPMorgan (JPM) and Bank of America (BAC)—but defaults can erode that quickly.

2. Consumer Loans

   
   

Broadly, this includes auto, student, and personal loans. Total non-mortgage consumer debt hit ~$5 trillion in 2025, with auto loans at $1.66 trillion (stable but with rising delinquencies) and student loans at ~$1.7 trillion. Interest rates vary: Auto loans ~7-10%, personal loans 10-15%. Unlike cards, these are often secured or fixed-term, reducing lender risk but tying up borrower cash flow.

A key issue: Many loans are variable-rate, sensitive to Fed policy. With rates easing in late 2025, borrowing costs dropped, but high debt servicing (e.g., 10-15% of disposable income) limits economic flexibility. I'm skeptical of "easy credit" narratives—post-2008 regulations tightened underwriting, yet subprime lending persists, echoing pre-crisis vulnerabilities.

https://x.com/johnslade66/status/2009812242557202873?s=20

3. Credit Default Swaps (CDS)

CDS are derivatives where buyers pay premiums to sellers for protection against debt defaults (e.g., on bonds or loans). They're like insurance but can amplify risks if over-leveraged, as seen in the 2008 crisis when AIG's CDS exposure on mortgage-backed securities (MBS) nearly collapsed the system.

Current status (2025-2026): The market is ~$45 trillion notional value, but net exposure is lower due to netting. US sovereign CDS spreads are low (~20-30 basis points for 5-year), indicating minimal default fears. Post-Dodd-Frank, central clearing reduces systemic risk, but they're still used to hedge corporate and mortgage debt. No major blowups recently, but with rising US debt ($38.43T total), a fiscal crisis could spike premiums.

Mortgages

Mortgages dominate household debt at $13.07 trillion in Q3 2025, up $137 billion quarterly. Average rates fell to ~6.25% by late 2025, boosting originations to ~$2.2 trillion projected for 2026. ~70% of household debt is mortgages, often fixed-rate (30-year standard), providing stability but locking in high payments amid home prices up 30-50% since 2020.

Link to CDS: In 2008, subprime mortgages bundled into MBS were hedged via CDS, leading to contagion. Today, underwriting is stricter (e.g., higher credit scores), but affordability issues persist—delinquencies ticked up to 2-3%. Skeptically, with rates projected at 5.77% in 2026, a recession could still trigger defaults, though not 2008-scale.

Comparison to US 401(k) Retirement Plans

Credit systems (cards, loans, mortgages) fuel consumption via debt, while 401(k)s promote saving through tax-advantaged employer-sponsored plans. Average 401(k) balance: $326,459 overall in 2025, but varies by age—e.g., under 25: $6,899; 45-54: $188,643; Gen X: $192,300. Total assets: ~$8-10 trillion, invested mostly in stocks/bonds.

Contrast: Debt averages ~$100,000-150,000 per household (excluding mortgages), often at high rates, eroding wealth. 401(k)s build equity (e.g., 9-10% YoY growth in balances), but participation is uneven—only ~60% of workers have one, and low balances for young/middle-income groups highlight inequality. Debt finances current spending; 401(k)s defer it for retirement. High debt can crowd out contributions (e.g., via minimum payments), worsening long-term security.

Average Household Debt Levels

US household debt hit a record $18-19 trillion in Q3 2025, up 4.1% annualized. Per household: $150,000-160,000 average, but medians lower ($100,000) due to wealth skew. Breakdown: Mortgages 70%, student/auto/credit ~30%. By age: Gen Z/under 35: $20,000-40,000 (mostly student/credit); 35-44: $100,000+ (mortgages rising). As a % of GDP: ~85-90%, stable but high historically. Skeptically, these averages mask disparities—lower-income households carry disproportionate credit card debt at higher rates.

Potential Impacts on Stock Market and Real Economy

High debt levels boost short-term GDP via spending (e.g., consumer-driven 70% of US economy) but risk bubbles. Defaults could trigger recessions, as in 2008 when mortgage/CDS failures tanked stocks (-50% S&P). Today, with debt-to-income at ~100%, a rate hike or job losses could spike delinquencies, hitting banks' earnings and stocks (e.g., JPM/BAC down 10-20% in stress scenarios).

On markets: Rising debt correlates with volatility—e.g., credit spreads widen, pressuring financials (XLF ETF). But low CDS implies calm; a fiscal cliff (US debt $38T+) could invert that. Real economy: Debt overhang slows growth (e.g., less investment), but low rates sustain it. Inequality amplifies: Wealthy benefit from asset inflation (stocks/homes), while debtors struggle.

Trump's 10% Credit Card Interest Cap Proposal

Trump proposed a one-year cap at 10% starting Jan. 20, 2026, targeting "affordability" amid 20-30% rates. Bill Ackman called it a "mistake," warning lenders might cancel cards for high-risk users, ending subprime access and rewards programs (subsidized by revolvers). Impacts: Credit scarcer, not cheaper—pushing borrowers to payday loans (300%+ APR). Banks adapt by cutting limits, hurting stocks (JPM/BAC vulnerable).

Economy: Short-term relief (~$100B saved in interest), but long-term contraction if spending drops. Skeptically, enforcement needs Congress; past caps reduced access without lowering costs. This could exacerbate debt issues, not solve them.

Impacts on Regional Banks (Smaller, Local, or Specialized Issuers)

Regional banks (assets under $100B, like community banks or credit unions) are less diversified and rely more on consumer credit. A cap could halve yields (from 9-10% net), making subprime cards unviable. They might cut 30-50% of portfolios, leading to mass closures and reduced local lending. Credit unions call it "devastating" for members; historical parallels (e.g., 2010 debit caps) show smaller players slashing rewards first. Skeptically, this could spur mergers or failures in regions dependent on these institutions.

Impacts on Publicly Traded Banks (e.g., JPM, BAC, COF, C)

Larger banks are diversified but cards contribute 25-30% of revenue (e.g., JPM's $25.5B in 2024). Earnings could drop 10-20% for subprime-focused issuers like COF; stocks dipped post-announcement. Visa/Mastercard are less hit as networks, but issuers might tighten standards or end perks. Wall Street, which donated heavily to Trump, expects deregulation but views this as contradictory, potentially leading to lobbying or lawsuits. Overall, big banks adapt better but face volatility (e.g., 5-10% sector drops).

Trade Idea

Adobe Long

Archer-Daniels-Midland Company Long

Silver Short (Portfolio Swing Hedge)

Tron Long SL 0,2777 - TP 0,3721

Strategy Long

Meta Short

Depot Summary as of January 10, 2026

The MILF portfolio has achieved realized profits of €147,030 from closed positions since April 2025, spanning stocks, cryptos, indices, and derivatives like Nike, Ethereum, Bitcoin, and various WKNs (e.g., SX7LHV, UJ1SQ7). Key wins included UJ1SQ7 (€7,454 gain) and Solana long (€12,117), offset by losses like ALPHA USDT (-€3,500) and Mana (-€4,572). Total equity plus gains stands at €247,030, with a sample branch allocation: Stocks 40% (€40k cap), Intraday Trading 20% (€20k), Commodities 20% (€20k), Misc 5% (€5k), Hedge 15% (€15k).

Currently, 4 positions are open:

• BCI 25 Index (1 unit): Entry €14,800; Current ~€15,709 (as of Jan 9; latest ~€15,853 per Bitpanda data); Unrealized +€909.

• BCI 25 Index (0.3 units): Entry €6,011; Current ~€4,713; Unrealized -€1,298.

• AMZN Long (750 shares): Entry $232.80/share (€174,600 total); Current ~$247.38/share (€185,535 total); Unrealized +€10,935.

• New: Tron (TRX) Long: Entry $0.301

  
  

Aggregate open value: €205,957; Cash left: €41,073; Total portfolio: €257,576. Focus on low-risk, short-biased rebuild.

The trading ideas will be implemented tomorrow at the stock market opening.