- Political noise, earnings momentum, and fresh economic data collide as markets recalibrate 2026 expectations
- Conference commentary and bank earnings offer some clarity amid policy drama and macro crosscurrents
- Labor, inflation, and growth signals point toward a patient Fed… and eerily calm stocks and bonds
It’s been a slow start to the year. Not much macro news to capture eyeballs or Wall Street’s attention. Oh, just a regime overthrow in Venezuela, capital controls on defense-industry companies, possible QE-like activity in the mortgage-backed securities market, proposed caps on credit card interest rates, and a criminal-indictment threat forced upon Fed Chair Jerome Powell. Not much to write home about, yeah?
Indeed, it has been a hectic beginning to 2026. Amid so many macro curveballs and noise stemming from the White House, it has also been busy at the corporate level.
Conference Season Roundup
CEOs are not only tiptoeing around presidential comments and social media posts, but they are also presenting strategy updates and industry outlooks at major corporate conferences this week and throughout the month.
CES was reinvigorating for consumer tech last week, and right now we have data out from the National Retail Federation’s Retail’s Big Show happening in New York City, the ICR 29th Annual Conference in Orlando, and perhaps the most widely followed gathering of all—the JP Morgan 44th Annual Healthcare Conference in San Francisco.
Earnings Season Enters the Chat
Amid the slide decks and fireside chats, Q4 earnings reports are hitting left and right. JPMorgan Chase (JPM) and The Bank of New York Mellon (BK) posted results this past Tuesday, followed by Bank of America (BAC), Wells Fargo (WFC), and Citigroup earlier today.
Goldman Sachs (GS) and Morgan Stanley (MS) serve up revenue and profit figures on Thursday morning. The season broadens out to other cyclical sectors next week before big tech and AI snag the spotlight later in January.
Get the full lowdown in our Q4 earnings season preview.
Hello Data, My Old Friend
Rounding out the triad of volatility catalysts this week? Economic data.
Traders are back in the swing of things following the longest U.S. government shutdown in history—the December jobs report printed last Friday, CPI hit this past Tuesday, PPI and Retail Sales were released this morning, while manufacturing and housing data arrive Friday. With a chunk of domestic macro data in the bag, investors have a clearer view of the backdrop as we head into the heart of the reporting season.
According to our Economic Calendar, the New York Empire Manufacturing Index will be published tomorrow morning. This one often flies under the radar, but it may be worth putting under the microscope. It’s a January survey data point, providing a timely vibes check on the real economy in the Northeast region. Paired with the Philly Fed Business Outlook, released at the same time, market participants will get a pulse on optimism (or lack thereof) amid a soft labor environment and ongoing inflation concerns.
Going forward, business tax breaks could buoy corner-office sentiment, while record-high tax refund checks hitting consumers’ accounts starting next month just might improve households’ feelings on the economy… so long as jobs don’t fall off a cliff.
The Labor Market Stalemate Continues
Speaking of the employment situation, Initial Jobless Claims come at the usual time on Thursday, also before the bell. The “no-hire, no-fire” labor market presses on, so we expect the number of first-time applications for unemployment benefits to remain low. Continuing Claims, always published an extra week in arrears, could still be noisy from the holidays.
As it stands, the December nonfarm payrolls report was sort of a choose-your-own-adventure. The headline 50,000 jobs gain was below Street estimates, but the unemployment rate dropped 16 basis points to 4.375% from November. The bears can point to steep downward revisions to October–November payrolls, while the bulls hang their hats on broader labor data (including private-sector reports), possibly suggesting the softening employment trend is at or near its trough.
The Fed: Wait and See
What does it all mean for investors? Combine the December job numbers, inflation updates, and Retail Sales gain, and we get a recipe for the Fed to possibly stay on hold through Powell’s term as Fed chief (May 15). The Treasury market sees about two quarter-point rate cuts from now to year-end, and there will undoubtedly be added pressure on whoever the new chair is to curry enough favor among the 11 other FOMC voting members for a June cut.
The January 28 Fed interest rate decision will presumably come with extra fireworks, too. After Powell’s unprecedented direct video response to the federal subpoena last Sunday night, he will no doubt be probed about his thoughts and plans in light of renewed attacks from the White House. To be clear, President Trump denied knowledge of the Department of Justice’s inquiry. Through it all, both stock and bond volatility gauges are subdued.
Markets Shaking It All Off
In fact, markets have taken earnings, data, and policy intrigue in stride since the summer. The Dow Jones Industrial Average is now near 50,000, the S&P 500® is a stone’s throw from 7,000, and international indices press to record highs. The bond market seems to buy into the “TACO Trade” for the moment, but precious metals’ torrid rally underscores that all may not be well regarding fiscal and monetary matters.
For now, focusing on actual data and CEO commentary might be the best approach.
The Bottom Line
The macro setting is being set for 2026. Official economic reports have rolled in as scheduled after a Q4 data vacuum. At the same time, a decent start to the earnings season reminds investors that companies can still deliver strong profit growth despite theatrics playing out in Washington, DC. Keep both the data deck and earnings calendar on your radar in the weeks ahead.
Twitter: @ChristineLShort
The author may hold positions in mentioned securities. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
