Syz the moment

Investors are currently facing major unknowns: 1/ A major conflict in the Middle East. In this context, we believe investors should not lose sight of what we think remains a positive backdrop for stocks; 2/ The pendulum around AI which continues to swing between fear and excitement; 3/ Uncertainties about tariffs. But in this context, it is key to NOT OVERREACT to headlines and to keep in mind that the overall context remains positive for stocks: 1/ Corporate earnings continue to strengthen within and beyond AI 2/ The Fed maintains a bias toward easing 3/ The U.S. economy appears to be on track for another year of solid growth. On the later, US economic news published yesterday were impressive, starting with the solid ADP and ending with the blowout Service ISM number. The ADP number was the day's first positive surprise, as private jobs surged 3x from January and beat estimates, as they rose to 63K, the highest since November. Then it was the Service ISM print which smashed expectations (a 6-sigma beat), rising the most since Sept 2024 to the highest level since July 2022. The stagflation narrative was crushed, as the ISM's Prices Paid index tumbled to an 11 month low while everything else rose. The Citi US eco surprise index jumped from 30 to 39 in one session following the unexpectedly strong economic data. This set of very positive data was good enough to offset some of the scary news on the war front and propelled risk assets higher yesterday. Source: zerohedge

While emerging markets typically depend more heavily on commodity exports compared to developed markets, they also use a greater share of commodities relative to their GDP. This makes them vulnerable to the indirect consequences of higher oil prices, such as slowed global economic growth. Noteworthy exceptions include Brazil and Russia. Source: Goldman Sachs, Markets & Mayhem

US wholesale inflation rose sharply in December as the producer price index (PPI) jumped 0.5% month-over-month, exceeding expectations, driven by higher service costs. Core PPI also accelerated, climbing 0.8% MoM and 3.6% YoY, well above forecasts. The surge pressures corporate margins, especially for companies lacking pricing power, and may influence inventory cycles and earnings revisions. Market reactions, particularly in bonds and high-multiple equities, often precede headline recognition, highlighting the importance of liquidity signals. Source: Bloomberg TV @BloombergTV

Nearly $29tn was added to global debt in 2025, pushing the total to a record $348tn, according to IIF. Source: IIF, HolgerZ

The main political groups in the EU Parliament suspended legislative work on ratifying the deal on Monday, seeking clarity on Trump's new tariffs. The deal has already faced a rocky path, with the US expanding its 50% metals tariff to hundreds of additional products and Trump threatening to annex Greenland. The agreement, struck last summer, would impose a 15% tariff on most EU exports to the US while removing tariffs on US industrial goods. Source: Global Markets Investor, Bloomberg

Source: zerohedge

This marks one of the largest gaps in history, slightly down (0.2%) from the $903 billion recorded in 2024, despite new tariff policies. December 2025 saw a sharp 32.6% rise in the deficit to $70.3 billion due to surging imports. Source: Bloomberg

Job opening rates in key white-collar sectors are plunging to historic lows, according to BLS data. Finance and insurance rate is down to ~2%, the lowest in at least 14 years. Information sector openings are down to ~3%, near the cycle lows. Professional and business services FELL to ~4%, the 2nd-lowest in 12 years. All 3 sectors have seen openings fall -50% or more from their 2022 peaks. Source: Global Markets Investor, Bloomberg