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Tuesday, January 13

Noteworthy US mega-cap moves today: Visa Inc (V) -2.0%. Mastercard Inc (MA) -1.5%. 

Global equity markets are trading higher following the release of U.S. inflation data, which showed core inflation holding steady at 2.6%, slightly below expectations. This has sparked positive sentiment among investors, leading to increased bets on potential Federal Reserve rate cuts as traders reacted favorably to the stable inflation figures.

In Europe, stocks are experiencing mixed performance amid concerns over new tariffs imposed by President Trump on countries trading with Iran, which is weighing on market sentiment. The pan-European Stoxx 600 index reflects this cautious mood as investors await further economic data for clearer direction.

Meanwhile, in Asia, the Nikkei Index surged significantly due to a combination of strong corporate earnings and speculation about a potential snap election in Japan. This optimism contrasts with ongoing geopolitical tensions that could impact trade dynamics and investor confidence moving forward.

iShares China Large-Cap ETF (FXI) [-1.0%]
The iShares China Large-Cap ETF (FXI) has seen a decline of 0.9% since Monday. China is scrutinizing the involvement of foreign firms, including Jane Street Group, in its $859 billion ETF market, focusing on broker activities. Concurrently, the China commerce ministry will extend anti-dumping tariffs for another five years starting January 14, reflecting ongoing regulatory pressures. In macroeconomic news, President Trump’s announcement of a 25% tariff on nations engaging with Iran raises concerns about geopolitical tensions affecting global trade and indirectly impacting the Chinese market. Social media discussions noted that FXI recently reached a two-month high, coinciding with remarks about renewed trade tensions. Among the ETF's holdings, significant contributors to its performance included MPNGY, TCEHY, and XIACY, all of which experienced notable declines. Additionally, the AUD/USD pair has decreased slightly, suggesting broader market sentiment that may influence FXI's recent performance.

Energy Select Sector SPDR Fund (XLE) [+0.8%]
The Energy Select Sector SPDR Fund (XLE) has experienced a price increase of approximately 0.8%, rising by $0.31 with a trading volume of 353.6K shares. This performance stands out in a market where sectors like Consumer Discretionary and Technology have seen declines. Crude oil prices have also risen, influenced by concerns over potential production disruptions linked to U.S. intervention in Iran, supporting XLE's daily return. The recent release of U.S. CPI data, showing a month-over-month increase, aligns with expectations for lower inflation rates that could impact Federal Reserve monetary policy. Among the fund's holdings, notable contributors include XOM, CVX, COP, PSX, and OXY, all posting positive returns. Additionally, Brent crude oil prices increased by 1.30%, further reflecting broader market sentiment and influencing energy sector performance.

LHX | +10.9% | +7.8B
L3Harris Technologies Inc | Aerospace & Defense
L3Harris Technologies Inc. has announced a substantial partnership with the Department of Defense, featuring a proposed $1 billion investment aimed at boosting production capacity for solid rocket motors essential to U.S. and allied missile systems. This investment will convert into equity during a planned initial public offering of L3Harris' Missile Solutions unit, anticipated in the second half of 2026. This initiative is part of a broader strategy to create an independent company focused on propulsion systems. Following this news, shares of L3Harris surged in premarket trading, reflecting strong market response to the announcement. Social media discussions further highlighted the significance of this $1 billion investment, structured as a convertible preferred security, and reiterated plans for the missile unit's spin-off as a separately traded entity.

HII | +5.8% | +967.5M
Huntington Ingalls Industries Inc | Aerospace & Defense
Huntington Ingalls Industries Inc. has achieved a significant milestone with the successful demonstration of its Sea Launcher automated launch and recovery system for REMUS autonomous underwater vehicles. The test, conducted in Pocasset, Massachusetts, confirmed a fully autonomous launch and recovery sequence, a capability already validated in U.S. Navy operations. This system aims to enhance mission capabilities while minimizing risk to personnel, particularly in contested environments. Additionally, HII plans to integrate the REMUS vehicles with its ROMULUS unmanned surface vessel family to address evolving requirements from U.S. and allied navies. Concurrently, L3Harris Technologies Inc. has experienced a notable increase, which may correlate with the recent rise in HII's stock price.

CAH | +4.0% | +2.0B
Cardinal Health Inc | Health Care Distributors
Cardinal Health Inc has raised its fiscal year 2026 non-GAAP diluted EPS guidance to at least 10.00, up from the previous range of 9.65 to 9.85, with consensus expectations at 9.83. This revision reflects strong performance across its five operating segments. The company also anticipates Specialty revenues will exceed 50 billion in 2026 and expects over 30% revenue growth in its Biopharma solutions for the same fiscal year. These announcements were made during the J.P. Morgan Healthcare Conference and were published within the last hour, highlighting a positive outlook for the company.

DAL | -4.0% | -1.8B
Delta Air Lines Inc | Passenger Airlines
Delta Air Lines reported its fourth-quarter results, revealing adjusted earnings per share of 1.55, slightly above the consensus estimate of 1.52. However, revenue of 14.61 billion fell short of the expected 14.72 billion, contributing to a decline in stock price. For the first quarter of 2026, Delta anticipates adjusted EPS between 0.50 and 0.90, below the consensus of 0.72. The airline's full-year 2026 EPS guidance of 6.50 to 7.50 also missed analyst expectations of 7.32. Despite a strong finish to 2025 and a projected 20% year-over-year earnings increase in 2026, DAL shares dropped significantly in pre-market trading. The CEO noted record-high corporate demand and announced an order for 30 Boeing 787 Dreamliners to support international growth, with deliveries starting in 2031.

MA | -1.4% | -7.1B
Mastercard Inc | Transaction & Payment Processing Services
Mastercard Inc is experiencing a decline, influenced by the broader Transaction & Payment Processing Services sector, which is also moving lower. Recent analysis indicates a mixed sentiment among 11 analysts, with the average price target for Mastercard rising to $679.18, reflecting an increase from previous estimates. Nonetheless, concerns have been voiced by JPMorgan's CFO regarding potential caps on credit card interest rates that could adversely affect revenue streams for companies like Mastercard. Additionally, Compass Point has upgraded Mastercard to "buy" with a price target of $735, though this upgrade may not sufficiently counteract the prevailing negative sentiment related to regulatory impacts on credit card profitability. Conversations on social media have highlighted the New Credit Card Competition Act and its perceived negative implications for public companies, including Mastercard.

V | -1.7% | -11.8B
Visa Inc | Transaction & Payment Processing Services
Visa Inc has experienced a decline of 1.7% in pre-market trading. This movement coincides with comments from JPMorgan's CFO, Barnum, who stated that a cap on credit card interest rates would negatively impact consumers. This statement was released shortly before market close and may have influenced sentiment surrounding Visa. Additionally, discussions on social media reflect a negative view of the proposed Credit Card Competition Act, which is perceived to adversely affect publicly traded companies like Visa, as well as other financial entities such as Capital One and American Express. These conversations emerged during trading hours, approximately three hours ago.

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