Daily Newsletter 1/14/26

U.S. stocks slipped midweek as investors evaluated major bank earnings and monitored escalating geopolitical risks. The broad market index declined, the technology-focused composite fell more sharply, and the blue-chip benchmark posted a modest loss. Shares of large semiconductor companies such as Nvidia and Broadcom weighed heavily on technology indexes.

Safe-haven commodities extended their historic rally. Gold hit a new all-time high, silver climbed past a symbolic milestone not seen before, and copper reached another record.

In corporate results, Bank of America topped Wall Street forecasts for the final quarter of the previous year, supported by stronger lending income and equity trading activity. Wells Fargo underperformed revenue expectations but managed to beat on profits after adjusting for restructuring costs. Its overall gains benefited from the Federal Reserve’s earlier decision to lift the asset cap, though deposit mix challenges continued to weigh on its margins.

Citigroup delivered better-than-expected adjusted earnings, helped by steady performance across its banking, wealth, and institutional services divisions. Excluding costs tied to its Russia-related charge, underlying revenue rose, reflecting progress under Chief Executive Jane Fraser’s restructuring plan.

Adding to uncertainty, the Department of Justice reportedly issued a federal grand jury subpoena involving the Federal Reserve, spotlighting concerns over central bank independence. Goldman Sachs is scheduled to report next, rounding out a volatile week for the financial sector.

Despite recent turbulence, sentiment toward major U.S. banks remains broadly constructive.

Near-Term Expectations

In the current market environment, we are maintaining our core positions, with a focus on financials, large-cap banks, and defense sectors. Our portfolio has performed better than anticipated, supported by the timely decision made in early December to increase exposure to defense-related stocks. We currently hold options positions expiring in mid-January and late February of next year, along with a small equity allocation primarily in KBWB.

We plan to roll over certain existing positions and establish new ones as part of our portfolio strategy. Following the major options expiration on January 16, 2025, we will conduct a comprehensive portfolio review and update. Our portfolio, established at the beginning of December with a focus on defense and large-cap banks, has delivered strong returns to date. Real estate holdings have lagged by comparison, but overall performance remains satisfactory.

OUR TRADES

We share all our short-term trades in the Tactical Portfolio exclusively with paid subscribers, showing the exact entry time and price for every trade below. Subscribers receive timely buy and sell alerts via chat. Our approach is eclectic, blending macroeconomic insights with a quantitative methodology. We do not limit ourselves to specific markets or sectors, seeking to profit from any short or very short trade that fits our strategy. We use sophisticated option strategies to capitalize on short-term market movements, ensuring full transparency and prompt exit updates.