Indices: Powell Probe Rattles Markets, but Broader Benchmarks Remain Near Record Highs- US equity index futures drop after the DOJ opened a criminal investigation into Federal Reserve Chairman Jerome Powell (see FX/Central Banks below), a development that heightened concerns over central bank independence; the S&P 500 (w/w +1.1% to 6,966) and Nasdaq 100 (w/w +1.2% to 25,766) had posted strong gains last week, while the Dow 30 (w/w +2.1% to 49,504) reached new record highs amid broad market optimism; the Russell 2000 (w/w +4.3% to 2,624) outperformed, lifted by homebuilders and small-cap cyclical stocks; expect yields and market pricing of future Fed action to change, so far (CME’s FedWatch) seeing a hold until June (after Chairman Powell is replaced), with political pressure on monetary policy now a clearer riskStocks: Intel Praised, Homebuilders Climb, While Meme Stocks Suffer- Intel (NASDAQ:INTC) (+10.8%) jumped sharply after President Trump posted supportive comments following a meeting with CEO Lip-Bu Tan, highlighting the U.S. government’s shareholder position in the company; the move came alongside a broader rotation back into semiconductors, with the VanEck Semiconductor ETF (NASDAQ:SMH) rebounding 2.7% and strong gains in Lam Research (+8.7%), ASML (+6.7%) and Applied Materials (+6.9%)- Tesla (NASDAQ:TSLA) shares closed 2.1% higher but still ended slightly lower for the week, hurt by autonomy reveals out of CES- Meta (NASDAQ:META) (+1.1%) strikes deals with nuclear power companies Vistra (+10.5%) and Oklo (+7.9%) to support its AI-related energy needs, helping fuel enthusiasm around AI infrastructure spending- Decent session for Southwest Airlines (+3.7%) after getting a double upgrade from JPMorgan to overweight and a notable price target hike; Cleveland-Cliffs (+4.1%) also up on an upgrade to overweight out of Morgan Stanley; Lockheed Martin (+4.7%) upgraded to buy from hold out of Truist with a new price target- Homebuilders and home improvement retailers enjoy a positive session following President Trump’s orders for his ‘representatives’ to buy mortgage bonds: Lennar (+8.9%), DR Horton (+7.8%), Home Depot (+4.2%), Lowe’s (+4.3%)- Meme stock movers: Beyond Meat (-5.3%), Kohl’s (-5.6%), GoPro (-1.4%), Opendoor (+13.1%), AMC (+13.1%)- Crypto stocks ended Friday’s session in the red but today’s early lift for the underlying expected to give them a healthier session: Coinbase (-2%), MicroStrategy (-5.8%), Mara Holdings (-2.1%), Gemini Space Station (-4.5%), Bullish (-2.3%)Commodities: Powell Under Pressure Gives Gold a Lift to a Record High- Gold briefly reaches $4,600 this morning a record high aided by heightened geopolitical risks and growing conviction around further Federal Reserve rate cuts not just following Friday’s softer U.S. labour data but the pressure on Powell to lower interest rates (see FX/Central Banks below); silver with a larger percentage gain this morning reaches $84 and not far off its recent record high, and taking the gold/silver ratio to a short-term support level underneath 55- Oil prices (WTI) trade around $59 as markets price in heightened geopolitical supply risks from any U.S. military intervention in Iran, partially offsetting worries over rising global inventories and softer Trump talk on Venezuela; Baker Hughes data shows the U.S. oil rig count fell to 409 from 412FX/Central Banks/Crypto: Dollar Pullback on Powell Probe- Crypto climb takes Bitcoin above $92K as the dollar weakens on the FX front with similar percentage gains for Ether yet to reach $3.2K- Four-day rally in the US Dollar Index set to come to an end as it fails within the 98 handle pressured by Fed Chair Powell’s criminal investigation- Federal Reserve Chairman Powell warns against political interference affecting monetary policy after the DOJ opens a criminal investigation into him regarding his testimony before the Senate on the renovation of Fed office buildings and seen as added pressure by the Trump administration to bring down interest rates; Bostic that they’ve long had a K-shaped economy, and Barkin that the drop in the unemployment rate is welcome and that it may take until April for inflation data to be fully caught up- European Central Bank’s ECB’s Radev says the current level of rates is appropriate- Bloomberg report that Bank of Japan officials are set to keep rates on hold when they meet to decide on policy later this monthCapital.com Client Sentiment (w/w): Price Gains See Longs Unwind Across the Board- Indices: Price gains for key U.S. equity indices causes long bias to drop w/w in the S&P (71% backing away from 76% last Monday), Nasdaq no longer in heavy buy territory (falling from 72% to 57%) and so too the Dow (58% from 67%), and the Russell falling from extreme long (78% to 60% at the start of this week); elsewhere sentiment shifts in both DAX (from a majority long 55% to a majority short 55%) and Nikkei (from a heavy buy 68% to a slight sell 51%) as notable price gains in both saw longs close out and fresh shorts initiate- Commodities: Price increases causes client sentiment to fall out of extreme buy in gold (from 82% a week ago to 68%), silver (77% from 84%), and WTI (76% from 88%) while the pullback in natural gas caused the bias there to push further into extreme long territory (reaching 87%)- FX: Longs taking profit in USD/CHF sees the extreme buy sentiment drop there (to 81% from 88%), and shifts the bias in USD/JPY (from a slight buy 53% to a majority short 57%)CoT Speculator Sentiment (w/w): Shifts in the Dow, Raise Their WTI Buy Bias Notably- Indices: Net short and unchanged in the S&P (at 59%) and Russell (at a slight sell 51%), but shifts in the Dow (from a net short 51% to a net long 58%) and raise their net buy sentiment in the Nasdaq (to 61%)- Commodities: Extreme buy and little changed in gold (85% from 86%), raise their net long sentiment in silver (to 72%) and more so in WTI (to 89% from 80%)- FX: Heavy buy and rising in EUR (to 69%), net short in GBP but dropping (to 58% from 60%) and so too in AUD (55% from 56%), and on the verge of shifting in JPY (slight long 52%; i.e., slight sell USD/JPY 52%)Data: Generally Soft Out of the U.S., a Bit Better Out of Europe for a Change- U.S. Non-Farm Payrolls in December 50K below forecasts of 60K, wage growth up 0.3% m/m in line with expectations, and the unemployment rate fell slightly to 4.4% versus a forecast of 4.5% (household survey growth 232K and labor force participation drops to 62.4%), in all reflecting a labor market that’s softening but avoiding something worse; University of Michigan’s preliminary Consumer Sentiment for January improved to 54, above 53.5 expected, with year-ahead inflation expectations holding at 4.2% and 5-year expectations ticked up to 3.4% from 3.2%; building permits and housing starts both climbed in September while suffered drops in October- EZ: German industrial Production rebounded 0.8% m/m in November easily besting forecasts; EZ retail sales rose 0.2% m/m for the same month, beating 0.1% estimate, and up 2.3% y/y- Canada: employment growth of 8.2K in December beating expectations of -1.8K, but the unemployment rate ticked up to 6.8% from 6.7%Today:- Mostly low-impacting items out of the U.S., though noting what an FOMC member speaking might say regarding latest probe- EZ Sentix Investor Confidence (1:30 pm)This Week: CPI, Earnings Kickoffs, and a Chance We’ll Get That Supreme Court Tariff Ruling This Time Around- U.S. CPI tomorrow, PPI and retail sales on Wednesday, and the weekly unemployment claims on Thursdayo Earnings from the financial heavyweights with JPMorgan (NYSE:JPM) tomorrow, Bank of America (NYSE:BAC), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) on Wednesday, and both Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) on Thursday- In Europe, a string of economic data out of the UK on Thursday that’ll include GDP for the month of November- For China, trade data on Wednesday, and a few key items on Thursday- Supreme Court didn’t rule on the legality of tariffs last Friday with the next release of rulings expected on Wednesday