Market Wrap 2026-01-22

Core-Brief

22 Jan 2026 — 8 min read

Today's US Market Wrap — Key Points

Equities rose on easing geopolitical concerns; comms led.
US data mixed: PCE met expectations, GDP revised up, claims fell.
Dollar weakened; Antipodeans gained. Crude oil declined.
Focus shifts to global PMIs, BoJ, and earnings reports.

Already a member? Sign in to unlock the full wrap

MARKET WRAP

US equities advanced, building on gains from the prior session after reports that additional tariffs on EU nations over Greenland would not be imposed. Details surrounding a potential US-NATO agreement emerged, with indications of "total access" without cost, although this contrasts with earlier reports suggesting limited land involvement. Risk appetite improved, offsetting an initial selloff. The communications sector led gains, driven by a Meta (META, +5.7%) rally following positive commentary from Jefferies. Tesla's (TSLA, +4.2%) Robotaxi rollout in Austin supported consumer discretionary stocks, while real estate and utilities underperformed. US economic data had limited impact on fixed income and foreign exchange markets. Initial jobless claims remained steady, continued claims decreased, Q3 GDP was revised slightly upward but still below consensus, and November PCE data met expectations. The dollar weakened amid geopolitical developments, seemingly renewing the USD hedge trade, benefiting gold, which surpassed USD 4,900/oz. Antipodean currencies strengthened, with the AUD supported by strong overnight jobs data. The JPY lagged due to ongoing political uncertainty. Treasury yields were mixed, with the long end recovering earlier losses and the 2-year yield reaching new weekly highs. Oil prices declined due to positive geopolitical developments, including a meeting between the US, Ukraine, and Russia, and a larger-than-expected crude stock build.

US

PCE: November PCE data aligned with expectations, with headline M/M and Y/Y both at 0.2% and 2.8%, respectively, and core M/M and Y/Y at 0.2% and 2.8%, respectively. Personal income fell short of expectations at 0.3%, while personal spending matched expectations at 0.5%. Real consumption increased by 0.3%, and the core PCE deflator increased by 0.16%. October figures were also released. Pantheon Macroeconomics anticipates a 0.37% increase in the core PCE deflator for December, based on CPI data, but will update its forecast following PPI data. They also suggest uncertainty regarding whether the quarter-average inflation rate remained unchanged from Q3's 2.9% or edged down to 2.8% in Q4, both below the FOMC's forecast of 3.0%. Pantheon expects inflation to continue to undershoot expectations this year, citing low tariff revenues, negligible momentum in new rents, and signs of slowing wage growth. They forecast core PCE inflation to average 2.3% in Q4, below the FOMC's 2.5% forecast.

GDP FINAL (Q3): Q3 GDP was revised slightly higher to 4.4%, above the expected and prior 4.3%. Growth reflected increases in consumer spending, exports, government spending, and investment. GDP sales were revised down to 4.5% from 4.6%. Corporate profits were revised up to 4.7% from 4.2%. Core PCE was revised up to 2.9%, with the headline matching expectations of 2.8%. Oxford Economics anticipates a slowdown in Q4 due to the shutdown and a drop in auto sales, but notes that "swings in net trade and inventories driven by shifts in timing of shipments around tariff deadlines pose an upside risk".

JOBLESS CLAIMS: Initial jobless claims (w/e Jan 17th) were lower than expected at 200k, with the 4-week average ticking down to 201.5k. Continued claims (w/e Jan 10th) fell to 1.84 million. Initial claims are trending lower, indicating improvement in labor market conditions. Oxford Economics notes that layoff announcements in the fall did not significantly increase claims, and notifications of pending layoffs were down sharply in December, suggesting initial claims will remain subdued.

FIXED INCOME

T-NOTE (H6) SETTLED 2 TICKS LOWER AT 111-19

Treasuries flattened as US data had little impact. At settlement, 2-year +2.8bps at 3.614%, 3-year +2.5bps at 3.681%, 5-year +2.7bps at 3.849%, 7-year +1.8bps at 4.047%, 10-year +1bps at 4.251%, 20-year -1bps at 4.808%, 30-year -1.6bps at 4.49%.

THE DAY: Treasuries flattened, with short-duration yields rising and 20- and 30-year yields paring earlier gains. Geopolitical updates suggest stabilization of tensions between the US and EU regarding Greenland. Greenland and Denmark maintain that sovereignty is not negotiable. Trump provided details of the deal, stating there will be total access and no cost for the US. US data did not have a sustained impact on the curve. Claims data indicates no imminent labor market stress, with a drop in continued claims suggesting increased hiring. Q3 GDP was revised higher, and the November PCE report met expectations. Similar to the 20-year auction, indirect demand was strong in the 10-year TIPS auction, potentially explaining long-end outperformance as earlier trade/geopolitical fears subsided. ZN H6 traded between 111-14 and 111-24+.

SUPPLY:

US sold USD 21 billion of 10-year TIPS; tailed 2bps
The 10-year TIPS auction showed improvement, with the tail decreasing to 2bps from 5bps, and the dealer's bid proportion down to 12.2% from 17.8%. Indirect demand accounted for 67.4% of the bid, up from 56.1%. Directs accounted for 20.4% of the bid, down from 26.1%. The bid-to-cover ratio increased to 2.38x from 2.20x. The US is scheduled to sell USD 69 billion of 2-year notes on January 26th, USD 70 billion of 5-year notes on January 27th, and USD 44 billion of 7-year notes on January 29th, all settling on February 2nd.

Bills/Notes

US sold 4-week bills at a high rate of 3.630%, B/C 2.86x; sold 8-week bills at a high rate of 3.630%, B/C 2.84x
The US is scheduled to sell USD 89 billion of 13-week bills and USD 77 billion of 26-week bills on January 26th, and USD 90 billion of 6-week bills on January 27th, all settling on January 29th.
The US is scheduled to sell USD 30 billion of 2-year FRN on January 28th, settling on February 2nd.

STIRS/OPERATIONS

Market Implied Fed Rate Cut Pricing: January 0bps, March 2.1bps, April 6.2bps, December 42.2bps.
NY Fed RRP op demand at 2.06 billion across 14 counterparties.
EFFR at 3.64%, volumes at USD 95 billion on January 21st.
SOFR at 3.63%, volumes at USD 3.087 trillion on January 21st.

CRUDE

WTI (H6) SETTLED USD 1.26 LOWER AT 59.36/BBL; BRENT (H6) SETTLED 1.18 LOWER AT 64.06/BBL

Crude oil prices declined amid positive rhetoric regarding Greenland and Russia/Ukraine. Benchmarks were already lower due to the softening of the US stance on EU tariffs but fell further after Ukrainian President Zelensky announced a trilateral meeting of US, Russian, and Ukrainian officials in the UAE, following a meeting between Trump and Zelensky. Putin and Trump are also scheduled to meet. The EIA reported larger-than-expected builds in crude and gasoline stocks, and a surprise build in distillate stocks. Crude production fell 21k W/W. WTI and Brent traded between USD 58.96-60.82/bbl and USD 63.56-65.38/bbl, respectively, ending the session near the bottom of their ranges.

EQUITIES

CLOSES : SPX +0.55% at 6,913, NDX +0.76% at 25,518, DJI +0.63% at 49,384, RUT +0.76% at 2,719.

SECTORS: Real Estate -1.10%, Utilities -0.73%, Industrials -0.51%, Consumer Staples -0.14%, Health +0.03%, Energy +0.27%, Materials +0.62%, Financials +0.68%, Technology +0.70%, Consumer Discretionary +1.22%, Communication Services +1.57%.

EUROPEAN CLOSES : Euro Stoxx 50 +1.22% at 5,955, Dax 40 +1.28% at 24,876, FTSE 100 +0.12% at 10,150, CAC 40 +0.99% at 8,149, FTSE MIB +1.36% at 45,091, IBEX 35 +1.28% at 17,663, PSI +1.70% at 8,604, SMI +0.67% at 13,245, AEX +0.63% at 1,000

STOCK SPECIFICS:

Alphabet (GOOGL) was upgraded at Raymond James to 'Strong Buy' from 'Outperform'.
Apple (AAPL) announced a Lunar New Year promotion in China offering discounts of up to CNY 1,000. CEO Cook is not expected to step down imminently; Apple's Ternus adds design duties in new sign of CEO candidacy.
GameStop (GME) Chairman Ryan Cohen's stake rose to 9.3% after buying 500k shares on 21st Jan.
Leidos (LDOS) and OpenAI are deploying AI to transform federal operations.
Micron (MU) was initiated with an 'Outperform' at William Blair.
On Semiconductor (ON) and Microchip Technology (MCHP) were both upgraded at BNP Paribas.
Tesla (TSLA) CEO Musk noted Tesla Robotaxi drives have started in Austin with no safety monitor.
Venture Global (VG) said an arbitration tribunal ruled in its favor in a dispute with Repsol over LNG deliveries.
Warner Bros Discovery (WBD) said Paramount Skydance (PSKY) continues to make the same offer, which their board repeatedly rejected in favor of a superior merger with Netflix (NFLX). WBD is confident in its ability to achieve regulatory approval.
Jefferies said Meta’s (META) pullback offers attractive risk/reward, citing limited downside, AI-driven upside into 2026, and accelerating monetization at WhatsApp, Threads and Llama. The firm reiterated a 'Buy' rating and a USD 910 PT.

EARNINGS:

Abbott Laboratories (ABT): Revenue light & next quarter profit view light.
GE Aerospace (GE): EPS & revenue topped.
Knight-Swift (KNX): Profit light.
Mobileye (MBLY): Disappointing FY26 rev. guidance.
Procter & Gamble (PG): Top line light & maintains FY outlook.

FX

The Dollar weakened on Thursday, influenced by geopolitical factors related to Greenland and Russia/Ukraine. Trump indicated an agreed framework for a deal regarding Greenland. Trump and Zelensky had a "good" meeting and scheduled a trilateral meeting with Russia, preceding a meeting between Trump and Putin. Initial jobless claims were below expectations, while November PCE data met expectations, although personal income marginally missed.

G10 FX , excluding JPY, generally gained against the dollar. The Yen underperformed, with USD/JPY reaching a peak of 158.89 ahead of the BoJ rate decision. The Yen saw some reprieve after reports that Japan forecasts the primary balance to be in a deficit in FY26.

Antipodeans outperformed, supported by risk-on sentiment and the Australian employment report. The Australian economy added more jobs than expected, and the unemployment rate fell to 4.1%. AUD/USD traded between 0.6754-6845, and NZD/USD 0.5834-5910.

GBP strengthened but weakened in the European morning amid reports that UK Labour MP Andrew Gwynne is set to stand down, potentially clearing the way for Andy Burnham. The Pound recovered some losses as Sky reported that there is a high threshold for the mayor to step down to become an MP. Cable traded between 1.3402-3502.

EUR saw little action in Europe following the ECB Minutes.

NOK saw no notable move following the Norges Bank decision to maintain rates at 4%, with forward guidance indicating potential rate reductions later in the year.

In EMFX, the Yuan faced pressure after the PBoC Governor indicated potential for RRR and interest rate cuts this year. The CBRT cut its repo rate by 100bps to 37.00%, less than the expected 150bps reduction.

COMING UP :

Global Flash PMIs (Jan), UK Retail Sales (Dec), Canadian Retail Sales (Nov), US UoM Consumer Expectations Final (Jan). Events: BoJ Policy Announcement. Speakers: BoJ Governor Ueda; BoE’s Greene; ECB President Lagarde. Earnings: Ericsson