JPMorgan Results, CPI Due After Fresh Record Highs

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead.

0:17I'm Keith Lansford, and here is Schwab's early look at the markets for Tuesday, January 13th. J.P. Morgan Chase earnings and the December Consumer Price Index are due before the open today and could help set the tone. J.P. Morgan is the first of several more major companies in coming days and the largest of the bunch. Analysts expect earnings per share and revenue of$4.98 and$46.2 billion respectively. With bank stocks hitting records lately, the bar might be high for earnings results to impress investors. However, strength in the banking sector might indicate wider economic and corporate strength, putting other sectors in a positive light before earnings season accelerates over coming weeks.

1:03In monitoring bank results, investors will likely focus on credit availability and loan demand, both of which have seemed strong recently by several measures. Banks could provide more color and discuss what they see ahead. Speaking of which, J.P. Morgan's CEO, Jamie Dimon, often influences the market with his statements in the company's earnings releases as he discusses the industry and the broader economy. One question he might receive on the earnings call is his view on President Trump's proposal requiring issuers to limit interest rates on credit cards to 10 % for one year. That idea hurt bank and credit card stocks yesterday.

1:43Earnings from J.P. Morgan are followed Wednesday morning by Bank of America, Wells Fargo, and Citigroup. It's unusual that J.P. Morgan is all alone today. Usually, several big banks report on day one. This morning also brings results from Delta Airlines. Shares flew high the last few months following an upbeat earnings report from the company back in October. Analysts expect earnings per share of$1.53 on revenue of$14.7 billion. Last time out, investors cheered Delta's better-than-expected guidance, including improved 2026 profit margins. Premium travel trends could be in focus again for Delta and other airlines this quarter.

2:26United Airlines reports next week.

2:31Also competing for attention with J.P. Morgan early today is the December Consumer Price Index, or CPI. It's the first time since last fall's government shutdown that investors will receive fresh CPI news rather than something delayed. The producer price index, which tracks wholesale inflation, is due Wednesday. For CPI, analysts expect 0.3 % month-over-month growth in both headline and core inflation, with core excluding volatile food and energy prices. Annual core and headline inflation are both expected to rise 2.7%. That compares with 2.7 % headline and 2.6 % core annual CPI growth in November, though those numbers reflected data affected by the shutdown and may be somewhat discounted.

3:20Either way, analysts don't expect much progress toward the Fed's 2 % inflation goal, but Fed policymakers in their latest set of projections seem confident inflation can fall to near that level by late this year and achieve it by the end of 2027, though the metric most closely tracked by the Fed is the Personal Consumption Expenditures, or PCE, index, which reflects somewhat different inputs than CPI and is due later this month. The tariff impact on inflation remains under debate, with some economists thinking there could continue to be inflationary repercussions, though to date there's not much evidence of a huge effect on prices.

3:59Wholesale prices due Wednesday can sometimes tip off investors about future trends in consumer prices, so that's probably a good place to check for any tariff impact. Earnings reports in coming weeks from banks and other sectors might also offer clues on price trends. Other reports to watch this week include retail sales, existing and new home sales, and industrial production. Stocks initially fell Monday but finished the day at new highs for the S &P 500 index. News late Sunday that Federal Reserve Chairman Jerome Powell is under a Justice Department investigation related to renovation of Fed office buildings raised concerns among investors, analysts, and politicians about independence of the central bank.

4:46Powell's term ends in May. Republican Senator Tom Tillis threatened to oppose President Trump's nominees to the Fed until the matter is resolved, D.C. publication The Hill reported Monday. Tillis sits on the Senate Banking Committee. For his part, Powell called the building renovations a pretext and suggested the investigation is about pushing the Fed to lower interest rates. Trump said he hadn't been aware of the probe. The Tillis statement and Trump's response both calmed the market. Volatility, which popped about 10 percent first thing Monday, quickly rolled back. Also contributing to Monday's quick turnaround is a bullish investor base that views pullbacks as an opportunity to buy the dip.

5:31There's strong sector support, with about 70 percent of S &P 500 stocks trading at their 50-day moving averages or above to start the week, and only falling slightly to 68 % by late Monday. Certain sectors, including materials and financials, enjoy even stronger breadth. Financials at their 50 days started the week at 90 % and only fell to 83 % Monday despite the credit card proposal. As for that proposal, it's uncertain how it could be enforced, so investors appeared to shake off the news to some extent. Still, gold, silver, and bitcoin climbed Monday in what's been called the debasement trade, where investors seek assets unrelated to the U.S.

6:16dollar amid Fed independence concerns. Gold and silver hit new highs. The dollar finished lower, but has climbed since the start of the year and remains just above its 200-day moving average of 98.86 for the U.S. dollar index. We believe the market views Fed independence as crucial, said Cooper Howard, Director of Fixed Income Research and Strategy at the Schwab Center for Financial Research. A loss of Fed independence would likely send longer-term yields higher, steepen the yield curve, and send the dollar lower. There are a slew of Fed speakers this week who will likely be asked about this issue.

6:55Assuming CPI turns out near-expected levels, the impact on Fed rate policy might be muted. Friday's jobs report, with its drop in unemployment, sent odds of a rate cut this month to practically zero. Any uptick in inflation might affect odds for later months. As of late Monday, futures trading pointed to firm odds of at least two more rate cuts this year after the three that ended 2025. However, chances of cuts are relatively low until the Fed's June meeting, according to the CME FedWatch tool. Other data include new home sales today after the open, with September sales seen falling to 710 ,000 on a seasonally adjusted annual basis from 800 ,000 in August.

7:42Geopolitics shouldn't be discounted as a possible factor for stocks this week. The situation in Iran looks fluid, and President Trump meets with advisors today to discuss options there, Reuters said. Treasury yields ticked up for the benchmark 10-year note Monday, close to the top of the near-term range of 4.1 percent to 4.2 percent. The Treasury's$39 billion 10-year note auction saw good demand, Briefing.com said, shoring up ideas that investors still saw U.S. bonds as attractive. A three-year note auction earlier in the day also enjoyed solid buying. A 30-year bond auction is on tap today. The Fed's Beige Book on Wednesday is another possible highlight for the bond market, giving a look at economic trends across Fed districts.

8:32Nine of 11 S &P sectors rose yesterday, leaving only financials and energy in the red. The defensive consumer staples sector led by many lengths with 1.4 percent gains, possibly a sign of investor caution. However, cyclicals like industrials and materials performed well. cyclicals are sectors that tend to climb in an advancing economy. Looking at other individual performances Monday, Walmart jumped 3 % after Walmart and Alphabet shared plans to launch a new experience that pairs Google's Gemini with Walmart and Sam's Club. Walmart might also have gotten a boost from news of its inclusion into the NASDAQ 100 index, which means its shares could be listed among exchange-traded funds, or ETFs, that track that index.

9:22American Express, Visa, Capital One, and MasterCard all fell Monday. The proposal requiring issuers to limit interest rates on credit cards to 10 % for one year creates heightened near-term volatility in that group, JPMorgan Chase said, when it raised its price target on American Express and kept its neutral rating. Palantir rose 1 % on an upgrade from Citigroup. Shares of mining firms including Heckler, Newmont and Freeport-McMoran climbed sharply Monday as gold and silver prices moved higher. Silver jumped more than 7 % to fresh highs and has been lifted by a wave of speculative buying over the last two months.

10:06Copper rose with industrial metals helped by growing industrial demand during the data center buildup. Gold hit record highs, possibly reflecting uncertainty around the Fed and rate policy. Taiwan Semiconductor Manufacturing, which reports Thursday and is a key supplier for NVIDIA, gained 2.5 % after the New York Times announced that the U.S. is near a trade deal with Taiwan. Abercrombie & Fitch plunged 17 % Monday. The retailer cut the high end of its holiday guidance, CNBC reported. And Corweave climbed 12 % after Goldman Sachs initiated coverage with a neutral rating.

10:52The Dow Jones Industrial Average added 86.13 points Monday, or 0.17%, to 49 ,590.20. The S &P 500 Index climbed to 10.99 points, or 0.16%, to 6 ,977.27. and the Nasdaq Composite gained 62.56 points or 0.26 % to 23 ,733.90. This has been the Schwab Market Update podcast. To stay informed, visit www.schwab.com slash market update or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review. It really helps new listeners find the show. Join us for another update tomorrow.

11:50For important disclosures, see the show notes and schwab.com slash market update podcast.