"Inflation, Earnings, and the Davos Distraction"
Welcome to the second full trading week of 2026. While the mainstream financial press is busy fawning over the upcoming gathering of global elites in Switzerland, we are keeping our eyes on the real economy here at home.
The hangover from the December 31st Tax Cuts and Jobs Act (TCJA) expiration deadline is still fresh, and markets are looking for direction. Is the consumer resilient? Is the Fed finally cornered? Here is your day-by-day battle plan.
Monday, January 12: The Calm Before the CPI Storm
- The Landscape: Markets open quietly as investors hold their breath for tomorrow’s inflation data. The 10-year Treasury yield is the key metric to watch today—if it creeps up, it signals the bond market smells lingering inflation.
- The Republican Angle: Ignore the noise about "soft landings." Focus on energy sector performance. With geopolitical tensions simmering, domestic oil and gas remain the only true hedge against global instability. Watch for any administration comments on strategic petroleum reserve (SPR) levels—they are likely dangerously low after years of draining.
- Action: Review your cash positions. If tomorrow's CPI runs hot, buying opportunities in high-quality, dividend-paying defense and industrial stocks could open up by Wednesday.
Tuesday, January 13: CPI Day (The Inflation Truth)
- The Event: Consumer Price Index (CPI) Release (8:30 AM ET).
- The Reality: The consensus expects headline inflation to hold steady around 2.7%. The Fed wants you to believe the beast is tamed, but anyone buying groceries knows otherwise.
- The Republican Angle: Dig into the "Core CPI" numbers. Strip out the volatile food and energy, and look at services inflation. This is where wage spirals live. If this number is sticky, it validates the argument that government overspending (fiscal stimulus) is fighting against the Fed’s monetary tightening.
- Market Move: If CPI comes in hot (above 2.8%), expect a tech sell-off. Capital will flee speculative growth stocks and run toward value—think heavy machinery, aerospace, and energy infrastructure.
Wednesday, January 14: The Banks Speak & PPI
- The Event: Bank Earnings Kick-off. Reports from JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC).
- Also: Producer Price Index (PPI) at 8:30 AM ET.
- The Republican Angle:Bank CEO commentary will be more valuable than the numbers. Listen closely to Jamie Dimon. He often signals the "hurricane" before it hits.
- Credit Card Delinquencies: Are everyday Americans maxing out their cards to keep up with inflation? If banks are increasing "loss reserves," the consumer economy is cracking.
- Commercial Real Estate: Look for updates on their loan books. This is the next shoe to drop, driven by high rates and empty blue-city office towers.
- The PPI: This measures wholesale inflation (the cost of doing business). If this rises, it proves that regulations and energy costs are squeezing American producers.
Thursday, January 15: The "Davos" Prep & Jobless Claims
- The Event: Weekly Initial Jobless Claims (8:30 AM ET).
- The Context: Next week (Jan 19-23), the World Economic Forum meets in Davos. You will start seeing headlines today about "Global Cooperation" and "ESG 2.0."
- The Republican Angle: Treat the Davos news cycle as a contrarian indicator. When they talk about "phasing out fossil fuels," you look at long-term positions in U.S. natural gas (LNG) exporters. As the global elites plan their private jet routes to Switzerland, the actual U.S. labor market data (Jobless Claims) will tell us if American businesses are still hiring despite the regulatory headwinds.
- Watch Item: Defense stocks (Lockheed, RTX). As global instability is discussed, these order books tend to grow.
Friday, January 16: The Consumer Verdict
- The Event: Retail Sales Data (8:30 AM ET) & Consumer Sentiment.
- The Landscape: This data covers December spending—the holiday season.
- The Republican Angle: Did the American consumer actually spend money, or did they just spend more money for fewer goodsdue to inflation?
- Bull Case: Strong spending in "needs" (home improvement, staples) suggests resilience.
- Bear Case: If spending is up only on credit, we are borrowing time.
- Closing the Week: If the market ends the week lower due to hot inflation data (Tuesday) or weak earnings (Wednesday), use the dip to accumulate shares in companies with pricing power—those that can raise prices without losing customers (e.g., waste management, railroads, major insurers).
The Bottom Line for the Week
The media will try to sell you a narrative of "stabilization." Your job is to look at the debt, the regulatory burden, and the inflation floor.
- Buy: American Energy, Defense, and "Real Stuff" (Industrials).
- Sell/Avoid: ESG funds and speculative tech that relies on zero-percent interest rates that aren't coming back.
