Morning Brew January 9 2026

Good Morning

We are heading into the first “normal” Nonfarm Payroll release in quite some time. Expectations are for 60k jobs, 4.5% unemployment, and 3.6% growth in average earnings. While the initial reaction will likely follow the usual pattern, the bigger question is how relevant the data will be once digested. A key risk: How much pressure will the White House exert on the Fed, even in the face of potentially hawkish numbers?

We also expect rulings from the U.S. Supreme Court—most importantly on the legality of tariffs. According to Reuters, a reversal could require USD 150 billion in retrospective refunds.

Donald Trump is scheduled to meet the CEOs of big oil. 

Outside the U.S., the data calendar includes:

• German industrial production (08:00)
• Swiss unemployment (09:00)
• EU retail sales (11:00)

Politics will likely dominate the news flow. Tensions around Greenland remain elevated, and the U.S. administration’s actions are increasingly viewed as heavy‑handed internationally. The erosion of trust and goodwill is becoming striking.

Other headlines:

• China’s annual CPI accelerated to a 34‑month high, though the full‑year inflation rate fell to a 16‑year low, and producer deflation persisted.
• The U.S. October trade deficit narrowed to $29.4bn, the smallest since 2009, driven by weaker imports—especially pharmaceuticals. Imports are down 3.6% YoY, while exports are up 12.1%.
• Rio Tinto is in early‑stage discussions to acquire Glencore, a deal that would create the world’s largest mining company with a combined market cap near $207bn.
• General Motors will take a $6bn charge as it unwinds several EV investments—another sign of the sector pulling back amid shifting U.S. policy and fading demand.
• The U.S. Senate advanced a resolution restricting President Trump from taking further military action in Venezuela without congressional approval.

Markets:
U.S. equities were mixed. Investors rotated from tech into cyclicals and defence amid uncertainty over the Fed’s rate‑cut trajectory and scrutiny of AI‑related spending.

• Dow +0.7%
• S&P 500 +0.7%
• Nasdaq 100 –0.4%

Major tech names extended losses: Nvidia –2.2%, Broadcom –3.2%, Micron –3.7%, Oracle –1.7%.
Defence stocks rallied after President Trump proposed a $1.5 trillion military budget for 2027.
Energy names, including Exxon Mobil (+3.7%) and Chevron (+2.6%), advanced alongside a 4%+ rebound in crude.

The S&P 500 trades around 22x forward earnings, down from 23 in November but above the 5‑year average of 19.

FX & Rates:
The USD is testing 99, while 10‑year U.S. yields remain stable at 4.17%.
EURUSD 1.1650, GBPUSD 1.3430, USDJPY 157.40.

Precious Metals:
Gold and silver experienced another volatile session, swinging USD 3 within hours. Prices initially broke lower to the 73 handle, before rebounding to test 77.

Ole’s analysis highlights that annual index rebalancing is triggering mechanical, price‑insensitive futures selling after last year’s outsized gains. These flows are large in notional terms but concentrated in paper markets and do not signal weaker fundamentals. How prices behave during the five‑day rebalancing window will indicate whether recent gains were simply momentum‑driven or supported by deeper structural demand.

Why Defense is creeping into “core portfolio” conversations

• The big shift: Defense is no longer a “headline trade”. Early 2026 is showing it is becoming a standing line item when tensions flare in more than one region from US-Venezuela, to Greenland to China-Japan and others at the same time.
• Spending is rising, but the rules are tightening: Europe is trying to lock in a multi-year plan, while the US is signalling “deliver first” — which can create winners and losers within defense, not just lift the whole sector.
• AI is changing what ‘defense’ means: Budgets are moving from only big platforms to information advantage (drones, sensors, networks, software).

Ruben pays homage to Warren Buffet:  Investors love to say they ignore the messenger and follow the message. Then the messenger stops talking, and everyone suddenly checks the volume knob. Warren Buffett is dialing it down. In a 10 November 2025 letter, he says he will no longer write Berkshire Hathaway’s annual report and will step back from the annual meeting spotlight, “sort of”. That leaves a useful 2026 test: can the Berkshire process speak louder than the Buffett persona.

• DateCountryEvent
• 9-JanChina PPI, CPI
• 9-JanUSNonfarm Payrolls, University of Michigan
• 13-JanUSCPI
• 14-JanUSPPI, Existing Home Sales
• 14-JanChina Trade Data
• 15-JanUKGDP
• 15-JanUS Initial Jobless Claims, Initial Jobless Claims
• 16-JanDEInflation
• 19-JanChina Retail Sales, GDP, Urban Investment
• 19-JanCA PMI
• 19-JanUSMarket Holiday
• 20-JanChinaRate Decision
• 20-JanUKEmployment
• 20-JanDEZEW
• 21-JanUK CPI
• 22-JanUSGDP
• 22-JanAUCPI
• 23-JanJapanRate Deecision, CPI
• 23-JanUKRetail Sales
• 23-JanUSPMI&University of Michigan
• 26-JanUSDurable Goods
• 27-JanUSConsumer Confidence
• 28-JanAU CPI
• 28-JanCanadaRate Decision
• 28-JanUS Rate Decision
• 29-JanUS PCE
• 30-JanJapan CPI
• 30-JanSwitzerland KOF
• 30-JanEUGDP, Consumer Confidence.