Indices: Banks and Chips Drive Rebound- US equity index futures climb following a broad-based rebound where gains were driven by strength in semiconductors and financials (see Stocks below), lifting the S&P 500 (+0.3% to 6,944) and Nasdaq 100 (+0.3% to 25,547) while the Dow 30 (+0.6% to 49,442) outperformed among the large caps on strong bank earnings, and where the small-cap Russell 2000 (+0.9% to 2,674) enjoyed another climb to a record high; Treasury yields rose albeit less so on the furthest end, and market pricing (CME’s FedWatch) not far off fully pricing in a hold when the Fed meets later this month and sticking to June for the first rate cut of this year- U.S. and Taiwan reach a trade agreement which will involve the latter’s tech companies investing at least $250bn in the former, reciprocal tariffs to be reduced on Taiwanese imports from 20% to 15% though its chip companies that don’t build in the U.S. face a “likely” 100% tariff according to LutnickStocks: Chips Up Thanks to TSMC, Financials Following GS and MS- Shares of Nvidia (NASDAQ:NVDA) (+2.1%) rose as semiconductors outperformed following strong results and higher capital spending plans ($52-56bn in 2026) from Taiwan Semiconductor Manufacturing (NYSE:TSM) (+4.4%), reinforcing optimism around sustained AI demand and giving ASML (NASDAQ:ASML) (+6%) a boost; rival AMD (NASDAQ:AMD) (+1.9%) also advanced- Spotify (-4%) shares drop after it said it would raise its U.S. subscription price- Upgrade to overweight out of Barclays for Dell Technologies sees its shares finish 0.8% higher while Rocket Lab (-1.1%) suffers a red finish downgraded from overweight out of KeyBanc- Tough session for shares of Eli Lilly falling 3.8% by the close on a Reuters report the FDA decision regarding its obesity pill would be delayed until April- Meme stock movers: Beyond Meat (+8.1%), Krispy Kreme (-4.2%), Opendoor (-5.1%), AMC (+3.2%), BlackBerry (+1.4%), GameStop (+1.6%); Nokia (+3.3%) jumped following an upgrade to overweight at Morgan Stanley on expectations for AI-driven network demand- Crypto stocks track cryptocurrencies lower: Coinbase (-6.5%) fell after the company withdrew support for a U.S. Senate crypto market structure bill; MicroStrategy (-4.7%), Mara Holdings (-4.1%), Gemini Space Station (-3.2%), Bullish (-5%)- Earnings:o Morgan Stanley (NYSE:MS): Q4 earnings and revenue beat expectations, driven by strong wealth management and investment banking results; shares jump nearly 6%o Goldman Sachs (NYSE:GS): Q4 earnings top expectations with solid trading results; shares climb 4.6%o BlackRock (NYSE:BLK): earnings and revenue exceed estimates, AUM tops $14tn; shares gain 5.9%Commodities: Soft on Dollar Strength and Slight Easing of Geopolitical Tensions- Gold eases back below $4.6K as stronger-than-expected U.S. jobless claims lifted the dollar and reinforced expectations that the Fed will remain on hold in the near term, while President Trump’s softer rhetoric on Iran reduces immediate safe-haven demand; silver retreats to the $90s as he holds off on critical mineral tariffs- Oil prices (WTI) fell into the $58s as markets ease concerns over a potential U.S. military strike on Iran, it remains a headline-driven market in the current phaseFX/Central Banks/Crypto:- Bitcoin fell below $96K after crypto-related legislation stalled in Congress with Ether hovering around $3.3K- US Dollar Index rises to reach the 99s as jobless claims fall unexpectedly (see Data below), strengthening the greenback while USD/JPY traded briefly below 158 as intervention talk grows (see below)- Federal Reserve’s Barr emphasizes Fed independence, Barkin that today’s economy has two engines them being AI and the rich, Bostic notes inflation remains high requiring restrictive policy as he expects GDP to grow upward of 2% this year, Daly that projections for growth are solid, Paulson comfortable holding rates at the next meeting, Schmid warns cutting rates could worsen inflation, and Goolsbee that inflation would “come roaring back if you try to take away the independence of the central bank”- European Central Bank’s Lane and Lagarde indicate no near-term rate changes, Villeroy stresses keeping options open, Kazaks that policy rates are optimally positioned as inflation trends improve, and de Guindos on the importance of applying central bank independence to the U.S. Federal Reserve- Bank of England’s Q4 Credit Conditions Survey shows secured and unsecured household credit availability increasing slightly; corporate credit broadly unchanged, with small business credit rising- Japan’s Finance Minister Katayama that FX intervention is a potential option under U.S.-Japan agreement, and ready to take decisive action keeping all options on the tableCapital.com Client Sentiment: Shifts in USD/JPY as Intervention Talk Grows- Indices: Price gains translates into long sentiment falling, no longer in extreme buy territory in the S&P (76% from 79% yesterday), falls out of heavy buy in the Dow (64% from 75%), and dwindles further in the Russell (59% from 62%); elsewhere holds in the FTSE (long 59%), trimmed in the Hang Seng no longer extreme buy (76% from 78%), while increased a notch in the ASX (to 88%) even as it climbs- Commodities: Holds in gold in heavy buy territory (at 72%) and so too silver (at 73%) as fresh longs await an increase, and rises further into extreme buy territory in WTI (to 82% from 78%) following the latest pullback- FX: Shifts from the middle in USD/JPY (to a slight buy 52%), and moves back into heavy buy territory in USD/CAD (66%)Data: Upside Surprises Out of the US, UK, and EZ- U.S. Initial jobless claims for the week come in at 198K, well below both the forecast of 215K with continuing falling to 1.884m signalling relative strength in the labour market; Empire State Manufacturing Index for January surprises to the upside at 7.7 rising from a previous -3.7, while the Philly Fed Manufacturing Index rebounds to 12.6 from -8.8 far above expectations and recovering from contractionary territory; trade pricing data for November shows import prices rise 0.4% m/m and by 0.5% for exports with both hotter than expected- UK GDP for November rises 0.3% m/m, exceeding the forecast of 0.1% and reversing the prior month’s 0.1% contraction; industrial production accelerates 1.1% m/m above the anticipated 0.2%, and manufacturing production jumps 2.1% versus a forecast of 0.4%, suggesting broad-based industrial strength- EZ industrial production for November grows 0.7% m/m, slightly above the forecast of 0.5% and in line with the prior month, reflecting moderate manufacturing resilienceToday: Mostly Low-Impacting Items- U.S. industrial production (6:15 pm Dubai time), rig count data out of Baker Hughes (10 pm)o Earnings for PNC- In Europe, German CPI (11 am)