To The Moon

1. Bank Earnings Signal Robust Performance

Fourth-quarter results from major banks like Morgan Stanley and Bank of America highlighted the strong economic backdrop supporting their operations. Morgan Stanley reported a staggering 147% year-over-year earnings growth, fueled by robust investment banking and trading revenues. Similarly, Bank of America doubled its earnings, driven by higher interest income and improved trading activity.

The broader takeaway? The financial sector continues to thrive, bolstered by a growing economy, post-election market optimism, and lower interest rates compared to last year.

BoA

2. Corporate Earnings: A Mixed Bag

• Taiwan Semiconductor Manufacturing: Delivered strong results on the back of high demand for artificial intelligence (AI) hardware, underscoring the sector's growth potential. $Taiwan Semiconductor Manufacturing(TSM)$

• UnitedHealth Group: Raised concerns about its insurance business, projecting higher medical expense payouts, which dimmed its outlook for 2025.

3. Retail Sales Reflect Consumer Resilience

The December retail sales report, which encompassed the tail end of the holiday season, showed solid consumer spending despite a slight miss on economists’ expectations. A smaller-than-anticipated increase in car sales contributed to the miss, but the data indicated that shoppers remained active overall, reflecting continued consumer resilience.

4. Bessent Hearing: Tariffs and Economic Policy in Focus

Scott Bessent, Treasury Secretary nominee for the incoming Trump administration, provided insights into the administration’s potential economic policies:

• Tariffs: While Trump’s campaign suggested aggressive tariffs, Bessent hinted they might be less severe in practice and could serve as negotiation tools or industry protection measures.

• Economic Policy Direction: Bessent supports a broad interpretation of presidential authority on economic policy, including tariff implementation and Federal Reserve interactions.

• Tax and Revenue Plans: Bessent echoed Trump’s ideas of leveraging tariffs as a revenue source, a shift toward pre-World War II funding strategies.

Market Reaction

Despite upbeat bank earnings and resilient consumer spending, major indexes closed modestly lower after a volatile session:

• $.SPX(.SPX)$ : Down 0.2%

• Dow Jones Industrial Average: Down 0.2%

• $.IXIC(.IXIC)$ : Down 0.9% $Apple(AAPL)$ $Tesla Motors(TSLA)$

Conclusion

Today’s trading session reflected a balance of optimism and caution. While strong bank earnings and solid retail data underscored economic strength, concerns about tariffs and mixed corporate earnings weighed on sentiment. Investors will continue to monitor geopolitical developments, policy shifts, and upcoming earnings reports for market direction.

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This report is for informational purposes only and should not be taken as investment advice. Always consult a financial professional before making investment decisions.

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