OP Wire 1/13 (OP – Lite)

Market Watch: Tuesday, Key Developments & Stock Insights

U.S. stock index futures rose Tuesday, buoyed by easing fears of drastic trade tariffs under President-elect Donald Trump and ahead of critical inflation data. Here’s what you need to know:

Trade Tariff Updates

A Bloomberg report revealed that Trump’s economic team is considering gradual tariff hikes, aiming to boost leverage with trading partners while avoiding a sudden inflation surge. The proposed plan suggests monthly increases of 2% to 5% under the International Emergency Economic Powers Act, although Trump has yet to receive the proposal.

Trump, who assumes office on January 20, has vowed to impose steep tariffs—10% to 20% on imports and 60% on Chinese goods. Wall Street’s initial risk aversion due to these threats has slightly eased, as gradual implementation appears less disruptive to inflation and interest rates.

Inflation Data on Deck

Attention shifts to Wednesday’s Consumer Price Index (CPI) for December, providing clarity on interest rates. Analysts expect a 2.9% annual CPI increase, up from November’s 2.7%, and a steady month-on-month rise of 0.3%.

Tuesday brings the Producer Price Index (PPI), expected to climb 0.4% monthly and accelerate to 3.4% year-over-year from 3.0%.

Earnings Season Kickoff

This week marks the start of earnings season, headlined by major banks:

• Wednesday: JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), and Citigroup (C).
• Thursday: Bank of America (BAC), Morgan Stanley (MS), and Taiwan Semiconductor (TSM).

These results will set the tone for market direction, especially as high valuations and rate concerns weigh on stocks.

Sector News

• Healthcare Surge: UnitedHealth Group (UNH) and Humana (HUM) shares rose after proposed 2026 Medicare Advantage reimbursement rates indicated a 2.2% payment increase.
• Retail Rally: Lululemon (LULU) upgraded its holiday revenue outlook, while KB Home (KBH) soared 9% on stronger-than-expected Q4 earnings.

Crude Oil Slips

After surging on U.S. sanctions against Russian oil exports, oil prices retreated Tuesday:

• WTI fell 0.8% to $76.70/barrel.
• Brent dropped 0.9% to $80.30/barrel.

New sanctions targeting Russian producers and shipping vessels may disrupt global oil flows, forcing importers like China and India to diversify sources.

Key Analyst Ratings

• AMD: KeyBanc cut the price target to $150 from $220, citing disappointing GPU demand but maintained an Overweight rating, expecting recovery in late 2025.
• Amazon (AMZN): Wells Fargo raised its target to $212, noting stronger retail trends and margin improvements.
• Nvidia (NVDA): Citi reiterated a Buy rating with a $175 target, despite potential risks from new U.S. AI chip export restrictions.
• Microsoft (MSFT): Wells Fargo maintained a $515 target, expecting AI and Azure strength to unlock upside in the second half of 2025.

Social Media Buzz

• Meta (META): CEO Mark Zuckerberg met with Trump to mediate a lawsuit over his account suspension. Reports suggest discussions of a monetary settlement.
• TikTok: Denied rumors of a potential sale to Elon Musk, dismissing the claims as “pure fiction.”

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Key Analyst Ratings

• AMD: KeyBanc cut the price target to $150 from $220, citing disappointing GPU demand but maintained an Overweight rating, expecting recovery in late 2025.
• Amazon (AMZN): Wells Fargo raised its target to $212, noting stronger retail trends and margin improvements.
• Nvidia (NVDA): Citi reiterated a Buy rating with a $175 target, despite potential risks from new U.S. AI chip export restrictions.
• Microsoft (MSFT): Wells Fargo maintained a $515 target, expecting AI and Azure strength to unlock upside in the second half of 2025.

Social Media Buzz

• Meta (META): CEO Mark Zuckerberg met with Trump to mediate a lawsuit over his account suspension. Reports suggest discussions of a monetary settlement.
• TikTok: Denied rumors of a potential sale to Elon Musk, dismissing the claims as “pure fiction.”

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This Week’s Quick Hits

• Notable Data:
  • Tuesday: PPI.
  • Wednesday: CPI, Beige Book.
  • Thursday: Jobless Claims, Retail Sales.
• Focus Levels for NQ Futures:
  • Upside: 21300, 21550, 21800.
  • Downside: 20700, 20500, 20300.

Hot Plays

• Bull Targets: BABA, AAPL, DIS, Bitcoin, XRP.
• Bear Target: WMT.

See you in chat, and let’s make this week another win!

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